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  • USD/JPY bulls seeking a test of the 110 area for a 12-month high.  
  • Traders await the US jobs reports later this week and US stimulus noise.  

At the time of writing, USD/JPY is trading at 109.80 ad flat on the day so far. The pair has stuck to a tight range between 109.72 and 109.88 as traders assess the landscape following a mixed session on Wall Street.  

USD/JPY was printing as low as  109.37 in Asia trade on Monday but it gained ground towards the twelve-month highs in the 110 area to a high of 109.80 on Wall Street as the US dollar firmed.  

Wall Street’s main benchmarks started the week on the back foot.

This has  supported the US dollar as news circulated that global banks, such as Credit Suisse and Nomura, said they faced potential large losses after the  New York City-based Archegos Capital  defaulted on its margin call.

Nevertheless, the US treasury yields were higher  as investors awaited President Biden’s announcement of the $4tn infrastructure plan.

The 2-year government bond yields increased 1bp to 0.15%, 10-year government bond yields grew from 1.63% to 1.71%, testament to what is expected to be strong jobs reports later this week, strong  growth and inflation.  

The US dollar is firm on prospects of higher rates and this week’s Nonfarm Payrolls will be closely monitored for more inflationary risks.