- USD / JPY is moving higher for the second day in a row Tuesday amid stronger USD.
- A rally in US bond yields acts as a tailwind for the USD and continues to support the pair’s upward move.
- Risk aversion benefits the safe haven JPY and could limit the pair’s rally.
The pair USD/JPY moves with a slight positive bias during the European session on Tuesday, with the bulls making another attempt to conquer and seize momentum beyond the 109.00 level.
The US dollar has built on the previous day’s modest rebound from the lowest level since February 25. amid a modest rally in U.S. Treasury yields. This, in turn, has been seen as a key factor that has helped the USD / JPY pair to rise for the second day in a row on Tuesday.
Apart from this, the concern that Recent spike in COVID-19 cases could hamper Japan’s fragile economic recovery it has acted as a headwind for the Japanese yen. That said, a softer risk tone benefits the safe-haven JPY and could limit the rise in the USD / JPY pair.
Meanwhile, the fall is likely to remain supported amidst the expectations that rising inflation could force the Fed to tighten its monetary policy sooner rather than later. Therefore, the focus will remain on the latest US consumer inflation figures to be released on Wednesday.
Meanwhile, US bond yields will play a key role in influencing USD price dynamics. Aside from this, broader market risk sentiment will also be considered for some trading opportunities around USD / JPY amid the absence of relevant economic releases.
USD / JPY technical levels
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