- The dollar gains momentum at the beginning of a busy week.
- USD/JPY rises for the second day in a row.
- Strong support is building in the 145.00 area.
USD/JPY is rising for the second day in a row and extends the rebound after approaching 145.00. The pair it reached as high as 148.69 on Monday, the highest level since October 25. It remains bullish, above 148.50.
The rises are being driven by an advance in the dollar in the market and a rise in Treasury bond yields. This occurs at the beginning of a week that will include the meeting of the FOMC (decision on Wednesday) and the US employment report (Friday). On Monday the economic calendar looks relatively light ahead, with the Chicago PMI standing out.
The dollar advances at a moderate pace, with gains across the board. The DXY climbs 0.50% while the 10-year bond yields 4.05%, after reaching 4.08%. Wall Street futures point to a negative open with falls of 0.20% on average.
Data released Monday suggests that the intervention in the market by the Japanese authorities to contain the fall of the yen reached 42.2 billion dollars in October. This served to prevent a confirmation above 150.00 for the time being, but did not change the trend. The first intervention had been in September, when the USD/JPY reached 145.00. On October 21st, the pair hit a decade high at 151.93.
The divergence between the monetary policy of the Federal Reserve, which this week is expected to raise the interest rate by 75 basis points, and the Bank of Japan, which on Friday reaffirmed its ultra-accommodative policy, continues to be the fuel for the rally in the USD/JPY. Analysts indicate that as long as this divergence continues as it currently is, the interventions will not be successful.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.