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USD/JPY hits fresh daily highs, eyes monthly highs

  • US dollar gains momentum across the board and turns positive. 
  • Higher US yields add support to USD/JPY as Wall Street hits new record highs. 

The USD/JPY rose further during the American session reaching a fresh daily high above 110.00 but it remained under the weekly top it hit on Tuesday at 110.20. A stronger US dollar across the board boosted the pair. 

Data, yields and USD 

The greenback was trading modestly lower but started to reverse its trend following the release of US economic data, particularly the Philly Fed that surpassed expectations. After the beginning of the American session the greenback accelerated. The US dollar Index erased losses and climbed to 97.35, rebounding from weekly lows. 

The Dow Jones gains 0.60% and the Nasdaq 0.63%. US yields are higher on Thursday. The 10-year rose back to 1.81%. Despite the risk appetite in Wall Street, commodity currencies weakened versus the US dollar. 

Technical outlook 

The USD/JPY holds a bullish tone and a test of 110.20 (weekly high) seems likely. If it breaks above it would be trading at the highest since May. The next strong resistance is seen around 111.45/50. On the flip side, now 110.05 is the immediate support followed by 109.75.