USD/JPY extends gains above 106.50 amid higher US yields

• USD/JPY extended gains above 106.30 supported by a stronger USD.
• Higher US yields and a rally in Wall Street weakened the yen.

The USD/JPY pair printed a fresh daily high at 106.58 , the highest level since last Thursday. It was trading near the top with the bullish momentum intact. Since the Asian session it has been moving with an upside bias, the move accelerated during the last two hours.

The greenback gained momentum amid a recovery of equity prices in Wall Street. The DOW JONES up 0.82% and the NASDAQ 0.68%, both indexes recovery from yesterday’s sell-off. In the bond market, US yields were moving higher, weakened the demand for the yen. The US dollar was also higher against the Euro and the Swiss franc but it was losing ground against commodity and emerging market currencies.

US data released today had no impact on the market. Tomorrow the ADP report and the PMI are due. The key day regarding data is Friday when the US official employment report will be released.

Technical levels

To the upside, resistance levels might be seen at 106.75 (downtrend line), 107.00/05 and 107.25/30 (Mar 13 high). On the flip side, support could be located at 106.25, 105.95 and 105.65 (Apr 2 low).