USD/JPY re-takes 111.00 amid risk-on rally in Nikkei

The USD/JPY pair is back on 111 handle, accelerating gains beyond the last amid improved risk appetite for risky assets at expense of the safe-havens such as the Yen.

USD/JPY flirts with 5-DMA at 111.04

The US dollar buying regains momentum in early Europe, fuelling a minor bid-wave behind USD/JPY, with the rate now printing fresh daily highs near 111.10 levels. The renewed uptick in the major can be partly attributed to rising treasury yields, especially the shorter-duration yields, which received boost from San Francisco President Williams’ comments.

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Moreover, a risk-on rally seen in the Japanese stocks, despite dismal Chinese manufacturing PMI data, also lent support to the ongoing recovery in the USD/JPY pair. Japan’s benchmark index, the Nikkei 225, rose 1% to 19,850 levels.

The major now awaits the sentiment on the European open for fresh impetus. Meanwhile, the crucial US ADP jobs and ISM manufacturing data would direct USD flows in the NA session today.

USD/JPY Technical levels                 

Jim Langlands at FX Charts noted: “Currently sitting close to the 200 WMA, the momentum indicators still look a little soft and further downside probes would not surprise. If so, below 110.45/55 could then see a fall to last Thursday’s low/200 DMA of 110.23/15, below which could potentially head back to the Fibo level at 110.60, albeit unlikely ahead of Friday’s US Unemployment data.”

“On the topside, 111.00 will once again act as a pivot ahead of the session high of 111.22. Above this currently looks unlikely, but if wrong, minor levels would then lie at 111.45 and 111.85,” Jim added.