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BOJ governor Ueda’s remarks had been a driving issue for value motion on Tuesday however the remainder of it has been dictated by actions within the bond market. And that hasn’t been too useful for USD/JPY course this week. Treasury yields have additionally chopped round and the motion yesterday was a superb instance of that.
Yields had been initially decrease however recovered strongly in US buying and selling with 10-year yields rising to a excessive of 4.19%. It’s now down 2 bps to 4.158% however general, nonetheless holding above the 200-day shifting common of 4.10%. I might say that is still the important thing line within the sand for the bond market.
In flip, USD/JPY has seen forwards and backwards motion however is holding above its personal 100-day shifting common (purple line) on the stability.
USD/JPY day by day chart
The important thing technical degree is seen at 147.51 and because the upside momentum to start out the brand new 12 months hinges on value staying above that. The near-term image tells a extra complicated story this week although. Patrons and sellers are battling it out with value motion now sitting in between key technical ranges.
The 100-hour shifting common is seen at 147.93 whereas the 200-hour shifting common is seen at 147.46. The spot value is sitting in between that, highlighting a extra impartial near-term bias at present.
If something, the extra up and down however sideways motion in USD/JPY this week is a mirrored image of the strikes within the bond market as effectively.
I might argue that the technicals at the moment are the most effective information in deciphering what could come subsequent for each Treasury yields and USD/JPY, as outlined by the degrees above. But when there’s any takeaway, it’s that USD/JPY continues to be tied carefully to the bond marketplace for now.
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