USD/JPY clocks one-week high as Treasury yields rise

• USD/JPY hits a one-week high of 107.73.
• The US 10-year yield hit a one-month high.
• The 2-year yield rose to highest since September 2008.
• Ignored drop in the Asian equities.

The USD/JPY pair rose to 107.73 earlier today - the highest level since April 13, tracking the uptick in the treasury yields.

As of writing, the currency pair is trading at 107.60, up 0.24 percent on the day. Also, the currency pair is trading higher for the third straight day.

The gains could be associated with the rise in Treasury yields. The US 10-year yield rose to a one-month high of 2.934 percent in Asia. Meanwhile, the 2-year yield rose to 2.44 percent - the highest level since September 2008.

Further, it is interesting to see that the drop in the Asian equities has not played a spoilsport. Chinese stocks are down more than 1 percent and other major Asian indices are reporting at least a 0.4 percent decline. However, there are no takers for the Japanese Yen.

Ahead in the day, the spot will likely continue tracking the action in the bond markets and equities as the data calendar is light.

USD/JPY Technical Levels

A daily close above 107.78 would open the doors for a sustained rally to 108.28 (Jan. 26 low). A violation there would expose the descending 100-day moving average (MA), currently located at 109.06. On the downside, breach of support at 107.17 (10-day MA) could allow a pullback to 106.62 (April 10 low). A close lower would put the bears back into the driver's seat. In this case, the spot could target 105.55 (Feb. 16 low).