USD/JPY rises to test 116.20 again supported by higher US yields
- Dollar posts mixed results during the American session.
- USD/JPY supported by higher US yields.
- Upside remains capped by the critical resistance area of 116.20.
The USD/JPY rose following the release of US economic data and climbed further after the beginning of the American session to test the 116.20 area. It is hovering around 116.00, after being unable to break the key level.
If the dollar breaks above 116.20, more gains seem likely, with the initial target at the 2022 high at 116.35. A decline back under 115.80 would alleviate the bullish pressure, suggesting a slide to the 20-day Simple Moving Average at 115.35.
Dollar mixed, yields up
The DXY is up 0.43% on Thursday, but the greenback is falling versus commodity currencies. The rebound in commodity prices is helping currencies like AUD, CAD and NZD. While the deterioration in risk sentiment due to the war in Ukraine weighs on EUR and GBP.
The USD/JPY is higher despite the decline in equity prices due to higher US yields. The 10-year yields reached levels above 2% for the first time since February 25, while the 30-year peaked at 2.395%, the highest since May 2021.
Inflation numbers released on Thursday in the US showed the highest annual rate since 1982 at 7.9%. Despite being in line with the consensus forecast, the inflation numbers contribute to anchor expectations about more tightening from the Federal Reserve.
Technical levels