USD/JPY extends post-BOJ rally beyond 118.00

The USD/JPY pair stormed its way through 118 handle in the European session, as fresh demand emerged for the major near 117.70 region

USD/JPY: Potential rounding bottom on hourly sticks?

The dollar-yen pair caught a fresh bid-wave and extends its post-BOJ vertical rise beyond 118 handle, as the yen sees aggressive selling on the back of persistent risk-on sentiment.

While the main catalyst behind the latest upmove in the spot is the renewed strength seen in the US treasury yields across the curve, which underpins the broad demand for the US dollar. The USD index jumps +0.29% and flirts with daily tops at 103.39, while the US treasury yields rally +1.40% to 2%.

Meanwhile, BOJ’s steady policy stance and Kuroda’s comments on the yen also keeps the Japanese currency on the offers, driving the USD/JPY pair through the roof. Looking ahead, the major will be driven by the USD dynamics and broader market sentiment in absence of relevant macro news.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 118.43 (Dec 16 high). A break above the last, the major could test 118.67 (10-month highs) and 119 (round figure) beyond the last. While to the downside, the immediate support is seen at 117.84 (5-DMA) next at 117.21 (daily pivot) and below that at 116.73 (10-DMA).