The USD/JPY has jumped 60 pips higher after news that the US manufacturing ISM had improved expectations by a few tenths in August. The pair has reached with the rise the level 140.13, its highest price since August 1998.
The ISM Manufacturing PMI stood at 52.8 points in August, beating the market estimate of 52.0, still remaining in expansion territory. In addition, the employment component of the indicator has notably improved expectations by rising to 54.2 from 49.9, above the 49 estimates.
dollar index DXY has risen after the news to 109.81, standing very close to the 110.00 region and registering new highs in twenty years. Meanwhile, 10-year US bond yields have soared to 3.27%, their highest percentage in two months.
Waiting to digest the data, traders will continue to pay close attention to market sentiment, now dominated by risk aversion and flows to safe havens, which in this case benefit the dollar over the yen. The focus is now on the important US employment data for the month of August, the Non-Farm Payrolls, which will be published tomorrow at 12:30 GMT.
USD/JPY Levels
With the pair quoting at time of writing above 139.99, gaining 0.74% daily, first resistance appears at the psychological figure of 141.00. Above, the dollar can shoot towards 144.80July 1998 high, prior to 146.75, the high for June of that same year, and 147.63, the high for August 1998 and the highest level seen in 32 years.
In case of reversing its rise, the pair will find support at 139.05, daily low, prior to 138.05, August 30 floor. Below the latter, the dollar could slide towards around 137.55, where the weekly lows are.
Source: Fx Street
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