- Rising US 10-year yield pushes USD / JPY higher.
- The pair looks set to challenge the 100-day MA hurdle at 107.00.
USD / JPY is trading near 106.84 at time of release, representing a 0.28% gain on the day, after carving a bullish engulfing candle on Thursday.
The US 10-year yield is currently trading at 2.5-month highs near 0.78% and extends Thursday’s 10 basis point rise from 0.65% to 0.75%. As such, the pair looks well on its way to testing the 100-day simple moving average (SMA) hurdle, currently at 107.00.
Risk action in global stock markets supports the bullish case. The Dow JOnes industrial average jumped more than 0.5% on Thursday after the Federal Reserve chairman signaled high inflation tolerance. S&P 500-related futures are currently up 0.7%, while major Asian indices are flashing green. As a result, the anti-risk Japanese yen is expected to remain under pressure.
Acceptance above the 100-day SMA may invite stronger buying pressure and pave the way for the 200-day SMA, currently at 107.97. On the downside, Thursday’s low of 105.60 is the level to beat for the bears.