USD/JPY remains above 139.00

• The Japanese yen weakens on the rise in government bond yields.
• The Dollar Index rises 0.55% in a quiet session with little volume.
• USD/JPY heads for weekly loss despite Friday’s gains.

USD/JPY’s recovery was capped by the 139.50/60 area. Near the end of the week, the pair remains firm above 139.00 supported by rising sovereign bond yields as Wall Street posts gains.

Yen falls as yields rise

The Japanese yen fell across the board on Friday, weakened by rising bond yields. The yield on the US 10-year bond rose to 3.75%, a two-day high, while the German 10-year rose to 1.98%. On Wall Street, the Dow Jones rose 0.46% and the Nasdaq lost 0.29% in a short session.

The Dollar Index rose 0.55% on Friday, but still headed for the lowest weekly close since mid-August, weighed down by less rosy FOMC minutes. Next week, attention will turn to the Nonfarm Payrolls report due on Friday.

Firm below the 20-week SMA

USD/JPY is about to post a weekly loss of just over 100 points. During the week it traded at 142.24, but then fell back below the 20-week SMA of 140.90.

The pair continues to move around 140.00, far from the multi-decade high it hit in October. The declines so far have been contained above 137.50. A daily close below 138.50 would increase the bearish pressure.

USD/JPY weekly chart

technical levels