USD/JPY erases gains, still above 136.00

• Wall Street adds to gains while US Treasury yields remain steady.
• Japanese up versus US Dollar, steady versus other rivals.
• USD/JPY down for the second day in a row, still above 136.00.

The USD/JPY is falling on Thursday but still holds above the 136.00/30 support area. The pair peaked on Asian hours at 137.25 and then turned to the downside. It is hovering around 136.45, down for the second day in a row.

The US Dollar Index (DXY) is down by 0.28% despite modestly higher US Treasury yields and on the back of risk appetite. The biggest gainers on Thursday are commodity prices as gold and silver rise sharply.

The Japanese yen is up versus the US Dollar despite yields and higher equity prices. The Dow Jones is up by 0.74% and the Nasdaq gains more than 1%. Economic data released in the US came in below expectations with Initial Jobless Claims rising to 230K in the week ended December 3 while Continuing Claims increased by 62K in the week of November 26 to 1.671 million, the highest level since early February.

Key data to be released on Friday includes the Chinese Consumer Price Index, US Producer Price Index and the University of Michigan’s Consumer Sentiment.

USD/JPY weak but above 136.00/30

The intraday bias in USD/JPY point to the downside but losses seems limited while above 136.00/30. A break below would open the doors an extension of the decline.

On the upside, immediate resistance is seen at 136.70, followed by 137.00 and then 137.40. A firm break of 137.70 could change the short-term outlook from negative to neutral.

Technical levels