- USD / JPY gains traction for the third day in a row and soars to highs in more than a week.
- The underlying bullish tone and the recovery in US bond yields continue to support the bullish move in the pair.
- USD bulls remain on the defensive, although it does little to hamper the positive momentum of USD / JPY.
The pair USD/JPY has moved higher during the European session on Thursday, rally above the 106.00 level in one week highs.
The pair has built on this week’s good bounce, from below the key psychological level of 105.00, and has gained some continuation traction for the third day in a row on Thursday. The impulse is due exclusively to underlying bullish sentiment in financial markets, which tends to weigh on the demand for the Japanese yen as a safe haven.
Investors remain optimistic about a strong economic recovery World Amid Impressive Rate of Vaccination for COVID-19 and the progress of a massive US fiscal spending plan. House Majority Leader Steny Hoyer said the House will vote Friday or over the weekend on the $ 1.9 trillion pandemic aid package proposed by US President Joe Biden.
On the other hand, the US Food and Drug Administration has said that Johnson & Johnson’s One-Dose COVID-19 Vaccine Appeared Safe and Effective in Clinical Trials. The regulator could grant emergency use approval later this week. Furthermore, pessimistic comments from Fed Chairman Jerome Powell provided an additional boost to global risk sentiment.
The bulls have followed the signs of a New Momentum in US Treasury Yields Reflation trading, coupled with rising inflation expectations, has boosted the yield on the 10-year US government bond beyond 1.40% for the first time since February 2020. This, in turn, has helped offset a softer tone around the US dollar and has continued to support the upward movement of USD / JPY.
Market participants are now awaiting the US economic calendar, highlighting the release of the second (preliminary) estimate of fourth-quarter GDP data and durable goods orders. Apart from this, various speeches from influential members of the FOMC will influence the dynamics of USD prices. This, coupled with the broader market risk sentiment, could generate some trading opportunities around the USD / JPY pair.
USD / JPY technical levels
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