USD/JPY rises to 109.00 possibly due to uptick in T-yields

• USD finds in Asia.
• US 10-year yield clocks 42-month high.

The rising Treasury yield seems to have put a bid under the US dollar this Monday morning in Asia.

The USD/JPY pair is up more than 30 pips at 108.95 levels. Meanwhile, the yield on the 10-year treasury yield rose to 2.692 percent; the highest level since Jul. 2014.

The yield is up close to 30 basis points this month and could rise further if the US core personal consumption expenditure price index and personal spending figure (due at 13:30 GMT today) beat estimates.

It remains to be seen if the spot continues to rise, tracking the yields, given the weak correlation between the two. Further, the downside in JPY is likely to be restricted, courtesy of Kuroda's upbeat comments on inflation and growth at Davos.

USD/JPY Technical Levels

A break above 109.00 (1-hour 50-MA) would open doors for 109.29 (5-day MA) and 109.54 (1-hour 100-MA). On the other hand, a move below 108.51 (early Asian session low) could yield a re-test of 108.28 (previous day's low). A violation there would expose 108.00 (zero levels).