USD/JPY renews weekly highs, closes in on 110.00 on broad USD strength

  • USD/JPY pair preserves its bullish momentum on Friday.
  • US Dollar Index rises above 90.50 in the second half of the day.
  • 10-year US Treasury bond yield is up more than 2%.

The USD/JPY pair continues to push higher ahead of the weekend with the greenback preserving its strength during the American trading hours. As of writing, the pair was trading at its highest level in a week at 109.84, rising 0.48% on a daily basis. 

DXY extends daily rally beyond 90.50

The USD’s market valuation remains the primary driver of USD/JPY’s movements on Friday. In the absence of high-tier macroeconomic data releases, the more-than-2% increase seen in the benchmark 10-year US Treasury bond yield is helping the USD outperform its rivals. At the moment, the US Dollar Index (DXY) is up 0.55% on the day at 90.55.

Meanwhile, Wall Street’s main indexes, which opened in the positive territory on Friday, turned red in the last hour, providing an additional boost to the greenback.

The only data from the US revealed on Friday that the University of Michigan’s Consumer Sentiment Index improved modestly to 86.4 in June’s flash estimate from 82.9 in May. This reading came in better than the market expectation of 84 but failed to trigger a noticeable market reaction.

USD/JPY Weekly Forecast: Fed timing is everything.

“The USD/JPY’s minor gain this week brings it to the higher side of its six-week range, just as the trading for most of May plumbed the lower side of this 108.50-110.00 spread,” notes FXStreet Senior Analyst Joseph Trevisani. “Neither fundamental nor technical analysis provides much direction. Fundamentals are tied to the US Federal Reserve’s temporizing policy position and the BOJ’s lack of credible rate tools. “

Technical levels to watch for

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