USD / JPY consolidates gains above 114.00, focus is on US bond yields.

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  • USD / JPY is fluctuating within a tight range above 114.00 on Monday.
  • The yield on US 10-year T bonds is up more than 1%.
  • The main Wall Street indices seem to open in negative territory.

Following last week’s impressive rally, the pair USD/JPY stays relatively quiet on Monday and stays in a consolidation phase below multi-year high it set at 114.47 on Friday. At the time of writing, the pair is up 0.01% on the day, trading at 114.21.

Rising US Treasury Yields Continue to Fuel USD / JPY Rise. The benchmark 10-year US bond yield, which gained nearly 4% on Friday, is currently up 1.8% on the day to 1,602%.

Nevertheless, Cautious market sentiment is helping the safe-haven JPY to remain resilient against its rivals and limiting the rise of the USD / JPY. Reflecting the bleak sentiment, the major Wall Street indices remain on track to open in negative territory with US stock index futures shedding between 0.2% and 0.3%.

The only data that appears on the US economic calendar will be industrial production data for September. However, investors are likely to ignore this report and remain focused on US bond yields. Currently, the US dollar index posts modest daily gains at 94.05.

Short-term outlook for USD / JPY

UOB Group analysts believe that the pair could target 114.55 as long as it remains above the strong support level found at 113.00.

USD / JPY technical levels

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