USD/JPY bulls stumble but US yields remain supportive
Oct 10 (Reuters) -The move higher in USD/JPY came to a halt during Thursday’s session as the pair slipped back below 149. However, while the surge in U.S. jobless claims and a hawkish speech by Bank of Japan Deputy Governor, Ryozo Himino aided the pullback in USD/JPY, with U.S. yields remaining firm – the U.S 10-year yield trades at 4.1% – topside risks are likely to persist for the pair.
Technically, resistance at 149.32-40, which marks the mid-August highs is a hurdle that bulls will look to target. A close above could create further momentum to breach 150, which would then potentially open the door to the 200DMA at 151.54.
On the BoJ, this is largely playing second fiddle to the increased focus on the U.S. Presidential election and the move higher in U.S. Treasury yields.
Though BoJ Deputy Governor Ryozo Himino largely reiterated his hawkish stance, the potential timing for the next hike remains unchanged. The October meeting has been taken off the table amid the calendar conflict with Japan’s lower house elections at the end of the month. The next conceivable live meeting is December, where market pricing attaches a 33% probability.
That said, the BoJ trade is unlikely to garner a great deal of attention until after the U.S. election.
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USDJPY hourly chart https://tmsnrt.rs/3A1U84g
(Justin McQueen is a Reuters market analyst. The views expressed are his own.)
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