USD/JPY accelerates and exceeds 136.00 on rising yields

• Yen weakness pushes USD/JPY closer to decades high.
• Rise in yields and stocks keep the Japanese currency on the ropes.
• Dollar index up 0.10%, back above 104.00.

USD/JPY is accelerating the advance and climbed above 136.00 fueled by rising yields across the world. In addition, an advance in the equity markets contributes.

The pair rises for the third day in a row and trades at 136.13, the highest since Thursday. The break of 135.60 (now first support) reinforced the bullish short-term technical picture. Next resistance is seen at 136.30 and then last week’s (and decades’) high appears at 136.70.

Yen falls on all fronts

The European and US bond yields are rising steadily on Tuesday. The 10-year tranche of the Treasury bond is at 3.25%, the highest since June 22; while at 30 years it is at 3.36%, the highest level in a week.

On the other hand, the futures of wall street they are positive with rises on average of 0.52%. In Europe, the main markets also recorded moderate gains. This, along with the drop in sovereign bonds, is weighing on the yen again.

The Japanese currency is among the worst performers. At the same time, the dollar presents mixed results. DXY rises based on the advance of USD/JPY and trades above 104.00, cutting two days low.

The economic calendar shows ahead US data on Tuesday for consumer confidence (Conference Board) and home prices (S&P Case Shiller). The key figure for the week will be the core price index for personal consumption expenditure. In Japan, retail trade numbers will be released on Wednesday.

In Portugal, the annual meeting of the ECB continues to take place, which will have a discussion panel on Wednesday with the participation of Lagarde (ECB), Powell (Fed) and Bailey (Bank of England). At this time, several ECB officials continued with words in favor of raising rates in the coming months, reinforcing the rise in European bond yields.

Technical levels