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  • A follow-through pickup in the US bond yields pushed the USD to two year tops.
  • Risk-on mood weighed on the JPY’s safe-haven status and remained supportive.
  • Investors now look forward to the US ISM manufacturing PMI for a fresh impetus.

The greenback stood tall against its Japanese counterpart and lifted the USD/JPY pair to its highest level in almost two weeks, around the 108.40 region in the last hour.
A combination of supporting factors helped the pair to continue gaining positive traction for the fourth consecutive session on Tuesday and build on its recent strong recovery move from multi-year lows set in August.

Risk-on mood/stronger USD remained supportive

Growing optimism over a possible resolution of the prolonged US-China trade dispute remained supportive of the prevalent risk-on mood and continued denting demand for traditional safe-haven currencies – like the Japanese Yen.
Improving global risk sentiment was further reinforced by a goodish follow-through pickup in the US Treasury bond yields, which further fueled the recent US Dollar bullish run to two-year tops and remained supportive.
Adding to this, possibilities of some short-term trading stops being triggered on a sustained move beyond the 108.00 handle further collaborated to the pair’s ongoing momentum to the highest level since September 19.
It will now be interesting to see if the pair is able to capitalize on the bullish move or runs into some fresh supply at higher levels as market participants look forward to the release of US ISM manufacturing PMI for a fresh impetus.

Technical levels to watch