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USD/JPY Is the Bounce for Real?
This has been the third time that USD/JPY has tested the 111.00 figure and the third time that is has bounced off that level. Is three times the charm for the pair? It certainly appears that way as even the risk aversion flows from yesterday’s terrorist attacks could not drive it much lower.
For the past week USD/JPY has suffered from the lingering aftereffects of the surprisingly dovish FOMC meeting last week. But last night Fed officials were considerably more hawkish suggesting that rate hike may happen as soon as April. The net result has been an improvement in US yields with 10 year benchmark rallying to 1.90% level. For now that area remains stiff resistance but if the 10 year can push towards the 2.00% mark then USD/JPY could move to 115.00 in the near future.
In the meantime the market will get Durable Goods and Initial jobless claims tomorrow and if the data proves supportive it could help send the pair towards the 112.00 mark as the week comes to a close.