USD/JPY approaches 150.00 as yields rise and the hawkish Fed boosts the USD

• USD/JPY rises to 149.75, gaining 0.28%, as high US Treasury yields and the absence of a US government shutdown support the Dollar.
• Hardline sentiments from Federal Reserve officials, focused on price stability and possible additional rate hikes, support the dollar.
• The stance of the Japanese authorities on possible intervention in the currency market and the dovish policies of the Bank of Japan add a touch of caution to the rise of the pair.

He US dollar (USD) advances in front of Japanese yen (JPY) late in the North American session, gaining 0.28%, although it remains far from test 150.00 amid fears of imminent intervention by the Japanese authorities. The pair USD/JPY It is trading at 149.75, after reaching a daily low of 149.38.

The US Dollar advances against the Japanese Yen, boosted by rising US Treasury yields and a hawkish Federal Reserve, but fears of Japanese intervention limit gains

The dollar remains supported by high US Treasury yields, with the 10-year yield rising nearly ten basis points to 4.672%, and by risk aversion. Furthermore, the fact that there was no US government shutdown served as a lifeline for the Dollar, which extended its gains against a basket of six currencies, also called the Dollar Index (DXY), standing at 106.85, up 0.69%.

Meanwhile, Federal Reserve officials remained hawkish on Monday. Fed Governor Michelle Bowman favors a further rate hike on the grounds that inflation is too high and high oil prices could trigger another wave of inflation. Recently, Fed Chairman Powell stated that the US central bank is focused on price stability.

On the data front, business activity, while showing signs of recovery, remains in contraction territory, with the ISM remaining below the expansion/contraction threshold of 50, at 49.8, down from 47.9 in August.

In Japan, authorities continue to intervene in currency markets amid further deterioration of the Japanese yen (JPY). Although they expressed that fundamentals should be expressed in the USD/JPY exchange rate, the pair should rise further as the Bank of Japan (BoJ) sticks to its dovish stance of negative interest rates while maintaining its ultra-loose monetary policy.

USD/JPY Price Analysis: Technical Outlook

USD/JPY is in an uptrend and is trading above the Tenkan and Kijun-Sen lines and above the Ichimoku (Kumo) cloud. Fear of intervention prevented buyers from challenging the 150.00 figure, considered the first resistance, followed by the 151.94 signal of the last year. Conversely, if intervention occurs, key support levels are seen at the Tenkan-Sen at 148.59, the Senkou Span A at 147.87, followed by the Kijun-Sen at 147.15.

USD/JPY Price Anction – Daily Chart