- The pair trades within a tight range between 109.75 and 109.45.
- US 10-year yields navigate the upper end of the range near 2.92%.
- US Factory Orders, Durable Goods Orders next of relevance in the docket.
The greenback alternates gains with losses vs. its Japanese counterpart at the beginning of the week, taking USD/JPY to the 109.50 area for the time being.
USD/JPY looks to yields, data
Following Friday’s strong advance, spot is now showing some lack of follow through and navigates within a narrow range in the mid-109.00s, as market participants continue to digest the recent Payrolls figures.
In addition, the pick up in yields of the key US 10-year reference has been collaborating with the better tone in the pair in recent sessions. In fact, yields have now retaken levels above the key 2.90% area, meandering around 2.92%.
Looking ahead, April’s Factory Orders and Durable Goods Orders are due later in the US calendar.
Further out, speculators took their JPY net short positions to the highest level since March 3 during the week ended on May 29, as showed by the latest CFTC report.
USD/JPY levels to consider
As of writing the pair is losing 0.02% at 109.51 and a break below 108.28 (55-day sma) would open the door to 108.11 (low May 29) and finally 107.78 (high Apr.13). On the upside the next up barrier is located at 110.03 (high Feb.2) followed by 110.21 (200-day sma) and then 111.39 (high May 21).
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