USD/JPY stays steady at around 149.50 amid rising US bond yields, risk-on mood

• USD/JPY trades around 149.52, marking a slight gain of 0.02% from Monday.
• US 10-year Treasury bond yield climbs nine basis points to 4.70%, despite Philadelphia Fed Harker dovish comments.
• Japanese economic data to feature Balance of Trade; Yen watches for intervention threats.

USD/JPY fluctuates at around 149.52 as Tuesday’s Asian session begins after printing minimal gains of 0.02% on Monday. A risk-on impulse maintained the US Dollar (USD) underpinned against the Japanese Yen (JPY). Also, the rise in US Treasury bond yields weighed on the Yen.

US Dollar Index falls, capping gains; diplomatic efforts in Middle East conflict boost risk appetite

A risk-on impulse characterized Monday’s session amid diplomatic efforts to prevent a spill-over of the conflict between Israel and Hamas, with other players watching the developments for possible involvement in a possible escalation.

The US 10-year Treasury bond yield rose nine basis points to 4.70%, a tailwind for the USD/JPY pair, though the rally was capped by overall US Dollar weakness. The US Dollar Index (DXY), a basket of six currencies that trades against the US Dollar, dropped 0.43% to 106.21.

One of the drivers behind the overall US Dollar weakness is the Philadelphia Fed President Patrick Harker, who emphasized last week’s words that the US central bank could be done hiking interest rates. On the data front, the New York Empire State Manufacturing Index for October plunged less than the foreseen -7, at -4.6, though it slid compared to September’s data due to a deterioration in new orders, while prices paid eased, following the inflation downtrend.

Ahead in the week, the Japanese economic docket would feature the Balance of Trader, though the Yen would remain gathering direction on intervention threats by Japanese authorities. On the US front, the calendar will feature Retail Sales, Industrial Production, and Fed speakers.

USD/JPY Price Analysis: Technical outlook

After Monday’s trading day, the USD/JPY remains neutral to upward bias, exchanging hands above the Ichimoku Cloud (Kumo) and the Tenkan and Kijun-Sen levels. The major remains trading sideways, though slightly tilted to the upside. The first resistance is seen at last week’s high of 149.83, followed by the psychological 150.00 figure. Once cleared, the pair might reach the year-to-date (YTD) high of 150.16. On the flip side, if the major slumps below the Tenkan-Sen at 148.99, that would expose the Senkou Span A at 148.65 before sliding to the Kijun-Sen at 148.29.