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  • US dollar holds onto gains amid risk aversion, higher yields.
  • Yen retreats across the board during the American session.

The USD/JPY is rising for the fourth consecutive day, supported by higher US yields and even risk aversion. The pair is trading at 106.60, at the highest level since August. The dollar is about to post the biggest weekly gain in months.

As the US 10-year yield stands at 1.50%, the greenback continues to be supported in the market. Higher yields also weigh on the yen. The Japanese currency dropped across the board as the sell-off in Wall Street eased. Actually, the Nasdaq is in positive territory but not the Dow Jones that drops by 0.95%. Stocks are set for the worst weekly performance since October.

Economic data from the US came in mixed. Personal income and spending rose above expectations with a 10% increase in income during January. The Chicago PMI fell unexpectedly while consumer sentiment was revised higher from the preliminary reading. The numbers have no impact as markets participants focus on Wall Street and the bond market.

USD/JPY bullish trend firm

From a technical perspective, the USD/JPY continues to look bullish, even amid some overbought readings in charts. The pair is about to post the first weekly close above the 55-week moving average since June.

The trend in USD/JPY is to the upside. Considering the sharp increase, a correction should not be ruled out. Support levels might be seen at 106.20, followed by 105.80.

Technical levels


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