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  • 10-year US T-bond yield rebounds sharply, gains more than 5%.
  • US Dollar Index rises toward mid-97s on upbeat NFP data.
  • USD/JPY looks to post second straight weekly gains.

The USD/JPY pair broke above the 108 mark in the early trading hours of the American session on Friday and touched its highest level since mid-June at 108.62. With the trading action turning subdued in the last couple of hours, the pair started to consolidate its gains and was last seen trading at 108.55, adding 0.72% on a daily basis. With today’s upsurge, the pair now remains on track to close in the positive territory on the weekly chart.

The U.S. Bureau of Labor Statistics (BLS) today announced that the nonfarm payrolls in June increased by 224,000 following May’s disappointing +72,000 (revised from 75,000) reading and surpassed the market expectation of 160,000 by a wide margin. The BLS also reported that annual wage inflation remained steady at 3.1% and the unemployment rate ticked up to 3.7%.

With the upbeat NFP data suggesting that the Fed may not act prematurely regarding rate cuts, the greenback gathered strength and the US Dollar Index rose to its highest level in more than two weeks at 97.44. At the moment, the index is up 0.63% on the day at 97.33.

Additionally, falling odds of more than 1 rate cut in the remainder of the year allowed the Treasury bond yield to turn north. The 10-year reference rose more than 5% and is now sitting above the critical 2% threshold, helping the pair preserve its daily gains.

Technical levels to watch for