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  • US 10-year T-bond yield jumps to 3-week highs.
  • US Dollar Index recovers above 96 on upbeat data.
  • Q4 GDP growth in the U.S. beats experts’ forecasts.

After spending the majority of the day in a tight range below the 111 mark, the USD/JPY pair gained more than 50 pips since the start of the NA session and reached its highest level of 2019 at 110.43. As of writing, the pair was trading at 111.35, adding 0.32% on a daily basis.

A decisive rebound witnessed in the US Dollar Index following the strong macroeconomic data releases from the United States provided the primary boost to the pair. The U.S. Bureau of Economic Analysis in its initial estimate today reported that the real GDP was expected to grow by 2.6% in the fourth quarter to beat the market expectation of 2.3%. Moreover, the ISM-Chicago’s PMI jumped to its highest level since December 2017 at 64.7 in February from 56.7 in January. At the moment, the DXY is up 0.06% on the day at 96.10.

In addition to the broad-based USD strength, a 0.7% increase in the 10-year T-bond yield allowed the positively-correlated pair to continue to push higher. Meanwhile, major equity indexes in the U.S. opened the day in the negative territory but were able to limit the losses, making it difficult for the JPY to find demand as a safe haven.

In the early Asian session on Friday, the unemployment rate and Tokyo CPI data from Japan will be looked upon for fresh impetus.

Technical levels to consider

The initial resistance for the pair aligns at 111.55 (200-DMA) ahead of 112 (psychological level) and 112.60 (Dec. 20 high). On the downside, supports are located at 111.15 (100-DMA), 110.55 (20-DMA) and 110 (psychological level).