- DXY falls for the first time in five days, but USD/JPY remains firm.
- Rise in Treasury bond yields and recovery in stock markets drain strength from the yen.
- The pair is approaching major resistance around 115.80.
The USD/JPY continues to advance, as it has been doing since the beginning of the week, although it is still in the range of the last few weeks. The pair climbed to 115.70, the highest since Thursday, and remains near 115.80, which is the upper limit of the current range, a key resistance level.
European markets show great dispersion, but are mostly trading in positive territory. While the futures of wall street They rise on average 0.25% after the sharp fall on Monday. This is playing against the yen. In turn, Treasury bond yields rise, giving USD/JPY more strength. To pick up pace, the pair needs to break and confirm above 115.80, leaving behind the sideways rally around 115.00 that has been going on for over two weeks.
Regarding US data, on Tuesday it will be the turn of the foreign trade and wholesale inventories report for January, which should not have any impact. The important figures of the week will be known on Thursday with those of retail inflation for February. The officials of the Federal Reserve they are already in the period where they cannot make public statements ahead of the meeting on March 15 and 16.
A new growth estimate for the Japan GDP for the fourth quarter and inflation data for China February, the annual rate of the CPI is expected to rise to 8.8%.
Despite the data, the focus is expected to remain on the war in Ukraine and its general impact. If fears and stock market declines persist, the yen would benefit as it has confirmed that it remains a safe haven currency. Against the dollar, it has failed to advance as a result of the rise in Treasury bond yields.
Technical levels
Source: Fx Street
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