- USD / JPY gains positive traction for the second day in a row on Tuesday.
- Risk appetite weighs on the safe-haven JPY and provides a good boost to the pair.
- A new rally in US bond yields continues to support the pair’s upward move.
The pair USD/JPY has moved up the mates and has reached a new one-week high, around the 113.70 region at the start of the European session.
The pair built on the positive movement of the previous day and gained some follow-up traction for the second consecutive day on Tuesday. The Upbeat market sentiment weighed on the safe-haven Japanese yen, which in turn was seen as a key factor that provided a modest boost to the USD / JPY pair.
Global risk sentiment stabilized amid news that Omicron patients had only mild symptoms. This helped alleviate fears about the economic fallout of the new coronavirus variant and boosted investor sentiment, which was evident by a positive tone around the stock markets.
The bulls took even more indications from a new recovery in US Treasury yields, although a subdued action in the price of the US dollar could limit any further gains for the USD / JPY pair. The fundamental backdrop, however, favors the bulls and supports the prospects for a further move to the upside in the near term.
Investors seem convinced that the Fed would be forced to adopt a more aggressive response to contain stubbornly high inflation.. In fact, markets have been pricing in the possibility of an eventual rate hike for May 2022, which should continue to act as a tailwind for the USD.
There is no major economic data release from the United States, leaving the USD / JPY at the mercy of broader market risk sentiment. Apart from this, US bond yields will influence USD price dynamics and could generate some significant trading opportunities around the pair.
USD / JPY technical levels
.
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.
