USD/JPY climbs to multi-day tops around 108.25 region

• USD/JPY gains traction for the second straight session amid some follow-through USD strength.
• The risk-off mood, a fresh leg down in the US bond yields might keep a lid on any runaway rally.
• Investors are likely to wait for the release of the US jobs report for a fresh directional impetus.

The USD buying interest picked up pace in the last hour and lifted the USD/JPY pair to three-day tops, around the 108.25 region, closer to 200-day SMA.

The pair added to the previous session’s modest recovery gains from weekly lows and gained some follow-through traction for the second consecutive session on Friday amid the prevailing strong bullish sentiment surrounding the US dollar.

Despite an unprecedented rise in the US initial weekly jobless claims, the greenback continued benefitting from its status as the global reserve currency in the wake of concerns over the worsening economic fallout from the coronavirus pandemic.

Meanwhile, a weaker tone around the equity markets extended some support to the Japanese yen’s safe-haven demand. This coupled with a fresh leg down in the US Treasury bond yields should keep a lid on any further gains, at least for now.

Moreover, investors are likely to refrain from placing any aggressive bullish bets, rather prefer to wait on the sidelines ahead of Friday’s important release of the closely watched US monthly jobs report – popularly known as NFP.

Technical levels to watch