- The dollar gains momentum despite a new decline on Wall Street.
- Rising US yields keep the yen under pressure.
- USD/JPY is approaching the 140.00 area again.
The USD/JPY is gaining momentum during the American session and rose to 139.08, reaching the highest level since mid-July. The pair remains bullish amid a stronger US dollar overall.
The USD rose strongly on the back of rising US yields. The 10-year yield rose to 3.14%, while the 2-year Treasury yield rose to 3.49%. Bonds fell even as US equities suffered a sharp decline. The Dow Jones falls 0.89% and the Nasdaq falls 1.25%.
US economic data showed an improvement in consumer confidence, with the CB index rising from 95.3 in July to 108.80 in August. The figures helped the US dollar.
Earlier on Tuesday, Japan released labor market data. The unemployment rate remained at 2.6%. Although market participants still see a 75 basis point rate hike by the Federal Reserve as possible, they expect the Bank of Japan to maintain its ultra-loose policy.
The divergence in monetary policy has pushed USD/JPY higher through 2022. If the pair sustains above 139.00, the next level to watch is the multi-decade high at 139.38; and then attention would turn to 140.00. On the other hand, support levels could be placed at 138.70, followed by 138.05 (daily low) and 137.65.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
