- The dollar shoots up and recovers strength after knowing the US CPI for April.
- The yen falls affected by soaring Treasury bond yields.
- USD/JPY erases daily losses and stops at resistance at 130.80.
The USD/JPY soared after the April inflation data from the United States, which showed higher than expected figures. The pair climbed from 129.80 to 130.80 in a few minutes, reaching daily highs. It then had a pullback towards 130.50.
The dollar rose broadly after the report and DXY erased much of the daily loss. At the same time Treasury yields soared. The 10-year rate went from 2.94% to 3.08%, while the 30-year rate rose from 3.08% to 3.21%. These rallies served as fuel for the USD/JPY rally.
The Consumer Price Index rose 8.3% from a year ago, more than the 8.1% expected, although less than the 8.5% the previous month, which had been the highest reading in 41 years. The data activated the rise of the dollar and also generated a sharp drop on Wall Street in the run-up to the opening.
The dollar after a few minutes moderated the rise in the market. Later he moderated the advance. The upward momentum came with the reinforcement of expectations of more interest rate hikes by the Federal Reserve.
Technical levels
Source: Fx Street
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