The dollar continues its unstoppable rise against the yen at the start of a new week. The USD/JPY has advanced 140 pips since the Asian open, reaching its highest level since June 2015 in the early European session. 125.43.
At time of writing, the pair maintains its strong bullish tone, trading above 125.33, gaining 0.78% daily.
The Bank of Japan cut its assessment for most regional economies and Governor Haruhiko Kuroda warned of great uncertainty about the consequences of the Ukraine crisis. Added to this, the widening of the yield spread between US and Japanese government bonds weighs on the Japanese currency.
Markets seem convinced that the Fed will tighten monetary policy at a faster pace to curb runaway inflation. This, coupled with concerns that the recent surge in commodity prices will put upward pressure on already high consumer prices, pushed US Treasury yields to a new high. of several years. This, in turn, helped the USD hold steady near its highest level since May 2020. Conversely, caution around BoJ intervention to defend its 0.25% yield target capped the USD’s upside potential. Japanese government bond.
Markets will also be keeping a close eye on the conflict in Ukraine, after President Volodymyr Zelenskyy said this morning that Russia is massing tens of thousands of troops for its next offensive.
USD/JPY Levels
Any advance to the upside of the pair should find initial resistance at 125.66ceiling of June 8, 2015. Above, the barrier moves to 125.93the highest level in almost twenty years, specifically since June 12, 2002. 134.55roof of January 22, 2002.
On the downside, initial support appears at the psychological zone 124.00, near the daily lows. further down wait 123.66floor of April 8, and 123.45lowest level of April 6.
Source: Fx Street
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