- A combination of factors helps the USD / JPY regain positive traction on Thursday.
- The post-FOMC decline in the USD comes to a halt amid a good rally in US bond yields.
- Risk appetite weighs on the safe-haven JPY and provides an additional boost to the upside in the pair.
The pair USD/JPY has managed to recover almost 45 pips from the lows of the Asian session and has shot up to new daily highs around the region of 108.85 at the start of the European session on Thursday.
Following the previous day’s pullback from the two-week highs, the pair has captured some new buying on Thursday and could now be looking take advantage of this week’s recovery from the lowest level since early March. Today’s move marks the third day of positive movement out of the previous four and is due to a combination of factors.
As investors looked past Wednesday’s pessimistic FOMC statement, the US dollar has found some support in a good recovery in US Treasury yields. and has registered a modest rebound from lows of more than two months. This has been seen as a key factor propelling the USD / JPY pair higher during the first half of trading action on Thursday.
Apart of this, underlying bullish sentiment in financial markets has weighed on the safe-haven Japanese yen and it has provided an additional boost to the USD / JPY pair. Now it will be interesting to see if the bulls are able to capitalize on the move or have a hard time finding acceptance above the 109.00 level. ahead of the release of the US Q1 GDP report., which will be announced at the beginning of the American session today.
The first estimate is expected to show that the world’s largest economy expanded at a solid annualized rate of 6.5% during the first quarter of 2021. An increase in consumer spending, supported by unprecedented government stimulus, is expected. , has fueled growth. A stronger reading could prop up the dollar and pave the way for some further positive movement in the USD / JPY pair.
USD / JPY technical levels
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