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  • USD/JPY is riding the Tokyo open a touch higher.
  • Bulls are firming from a daily confluence of support structure.  

USD/JPY is trading  0.11% higher on the session having climbed from a low of 109.51 to a high of 109.65 and within the overnight range of between  109.40, after a high of 109.88.

Markets were mostly  focused on the Federal Reserve’s next move with limited data to chew on.

Philadelphia Fed’s President, Patrick Harker, suggested that policymakers will  think about the best way to slow the pace of its asset purchases.  

Meanwhile, DXY, which measures the greenback against six rivals, was testing the lows but was up back to flat by the late afternoon on Wall Street to 89.8930 after recovering from an 89.8570 low.

The index paused just ahead of the Jan 7 levels of 89.533. The high was  90.2460 high.

April’s much weaker-than-expected jobs data weighed heavily on the greenback last time around, so Friday’s data will be critical for the precious metals markets riding the ebb and flow in the greenback.  

US treasury yields fell slightly in a largely muted Wednesday trading session, as the market awaits the US payrolls data due to be released Friday night. 2yr government bond yields held at 0.15%, and 10yr bond yields fell 2bps to 1.59%.

In terms of data, the market did have the release of the Fed’s Beige Book of regional economic conditions.

These  noted that the pace of the US  recovery had picked up somewhat in April and May:

“The national economy expanded at a moderate pace from early April to late May, a somewhat faster rate than the prior reporting period,” the U.S. central bank said in its Beige Book survey released on Wednesday.

Domestically,  Asahi reported that Japanese  PM Yoshihide Suga will call an election after the Olympics and para-Olympics explaining that  the government is considering putting together a new stimulus package before the snap election in the Autumn.  

USD/JPY technical analysis

The bulls are in charge at this juncture and supported by the 10 and 20 EMA bullish divergence, horizontal structure and the 61.8% Fibonacci retracement of the prior bullish impulse.