USD/JPY soars to 34-year high amidst rising US yields, risk aversion

FXStreet
Updated Apr 16, 2024 02:15
Mitrade

■USD/JPY continues its ascent, breaking past 154.00, driven by strong US economic data and risk aversion from Middle East tensions.


March's robust US Retail Sales highlight ongoing consumer strength, pushing up US Treasury yields.


Japanese officials voice worries over swift currency fluctuations, staying in close contact with global partners on financial and FX market developments.


The US Dollar extended its gains versus the Japanese Yen in early trading in the North American session, climbing above the 154.00 figure, although Japanese officials remain wary of the fast advance of the currency. Nevertheless, the USD/JPY exchanges hand at 154.37, up by 0.71, refreshing 34-year highs.


US Dollar strengthens against Yen, despite verbal intervention by Japanese officials


Over the weekend, developments in the Middle East spurred risk aversion in the financial markets. Due to remaining closed, Bitcoin was the main loser, though it has trimmed some of the pain inflicted on risk appetite. Iran’s offensive against Israel finished without casualties, though Tehran made its point that they would not remain arms crossed if Israel escalated the conflict.


According to Bloomberg, some US officials speaking anonymously said that the White House is urging Israel against retaliation.


Aside from these developments, economic data from the United States (US) sponsored the USD/JPY last leg-up, though it remains shy of cracking the 150.00 mark.


 The US Department of Labor revealed that Retail Sales in March rose by 0.7% MoM, above expectations of 0.4%. This shows an increase of 2.1% in Q1 2024 compared to last year's first quarter, an indication of consumers' strength.


Following the data, US Treasury yields are skyrocketing, with the short and long end of the curve rising more than 10 basis points (bps).


Fed’s Williams look for cuts in 2024


In the meantime, New York Fed President John Williams said that his baseline scenario projects rate cuts “will likely start this year.” He thinks the policy is restrictive, adding that strong fundamentals are driving consumer spending.


On the Japanese front, officials remain vocal, emphasizing that fast Forex moves are undesirable and should reflect fundamentals. Recently, a Senior Japan MoF Official said they’re in frequent and regular talks with the US and other countries' authorities on financial and FX market moves.


USD/JPY Price Analysis: Technical outlook


From a technical standpoint, the USD/JPY rally might continue if not for Japanese authorities jawboning, capping the uptrend. If the pair remains bid, it could test 155.00, seen as the line of the sand that might increase tension in the major, and it could trigger intervention by authorities. Conversely, if USD/JPY dips below 154.00, look for a test of the April 12 high turned support at 153.39, followed by the 153.00 mark.


USD/JPY


Overview

Today last price

154.12

Today Daily Change

0.87

Today Daily Change %

0.57

Today daily open

153.25

 


Trends

Daily SMA20

151.63

Daily SMA50

150.29

Daily SMA100

147.81

Daily SMA200

147.28

 


Levels

Previous Daily High

153.39

Previous Daily Low

152.59

Previous Weekly High

153.39

Previous Weekly Low

151.57

Previous Monthly High

151.97

Previous Monthly Low

146.48

Daily Fibonacci 38.2%

152.89

Daily Fibonacci 61.8%

153.08

Daily Pivot Point S1

152.77

Daily Pivot Point S2

152.28

Daily Pivot Point S3

151.97

Daily Pivot Point R1

153.56

Daily Pivot Point R2

153.87

Daily Pivot Point R3

154.36

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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