The USD/JPY has staged an impressive rally of almost 100 pips in the last few hours, rising from the Asian opening low at 125.35 to a new almost twenty year high at 126.31 in the European morning.
The pair has reached its highest price since May 2002 and trades at time of writing above 126.14, gaining 0.62% on the day.
The strength of the dollar drives the pair, as the DXY index that measures the greenback has reached the level a few minutes ago 100.52, maximum of 23 months. The 10 year US bond yields they rise to 2.78% today, approaching the highs since 2018 reached around 2.83% in recent days.
This, coupled with the wide divergence in monetary policy outlooks between the Fed and the Bank of Japan, further pushes flows away from the Japanese yen.
Market participants will be keeping an eye on sentiment and the economic calendar, which today releases US producer prices for the month of March.
USD/JPY Levels
If the bullish streak continues, the next resistance awaits in 129.17May 2002 ceiling. Higher up there is room to climb to the region of 133.85/90where the ceilings for March and April 2002 are.
In case of losing momentum, support is first in the psychological zone of 125.00. Underneath, the first stop may be at 124.76floor of April 12 and the next in the round figure 124.00.
Source: Fx Street
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