- The yen loses strength in the market due to the rise in the equity markets.
- The dollar firm despite risk appetite.
- USD/JPY heading for the highest daily close since January 2017.
The USD/JPY extended the rally and reached as high as 117.05, the level last visited in January 2017. After this it experienced a minor retracement to 116.75 and is again approaching 117.00, in a combination of rising stocks and dollar strength.
The raises also have a technical boost. The USD/JPY break of the 115.80/116.00 resistance zone gave it an extra boost; that level is now the key support. The next long-term resistance looms at the late-2016 highs at 118.70.
The greenback is rising moderately against most of its rivals, following Thursday’s inflation data, and ahead of next week’s Federal Reserve meeting.
The Treasury yields rose sharply on Thursday and remain near weekly highs. The 10-year tranche yields 1.98%, after having climbed over 2%. This is a key factor behind the rise in USD/JPY.
Another factor that is playing against the yen is the rise in equity markets. In Europe, major indices are up more than 1% and Wall Street futures are up 0.40%.
Technical levels
Source: Fx Street
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