- USD/JPY is headed for the highest daily close since August 2015.
- The US dollar remains strong against the Japanese yen, supported by rising US yields.
- The divergence between the Bank of Japan and the Fed is widening.
The USD/JPY is rising for the sixth day in a row on Friday. During the American session, it rose to 124.67, the highest level since March 28, and then fell back to 124.30 thanks to the volatility of the US dollar.
US yields continue to tell the story
USD/JPY continues to move in line with US yields. The 10-year yield peaked earlier at 2.72%, the highest level since February 2019, and the 30-year yield at 2.73%, the highest since May 2019. The key driver is the Fed’s plan Federal to raise interest rates more aggressively and begin reducing your balance.
The ongoing decline in bonds still offers dollar support. DXY is now up just 0.10%, but earlier hit 100.19, the highest level in nearly two years.
The yen is among the worst performers, also affected by the improvement in risk sentiment. Stocks in the US are paring weekly losses. The Dow Jones is up 0.63% while the Nasdaq is still down, falling 0.61% but from lows.
USD/JPY is about to post the fifth consecutive weekly gain. The divergence in the monetary policy path of the Federal Reserve and the Bank of Japan is set to widen and could continue to support the rally in the pair, which is trading at levels not seen since 2015.
Technical levels
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
