Taking a look at issues, it is fairly an easy scenario for USD/JPY in the intervening time; all issues thought of.
The pair has been on a tear amid the surge increased in Treasury yields as nicely, with a broader greenback rally additionally exacerbating the upside push from 120.00 to 130.00 previously two months.
We’re now holding on the key determine stage and patrons are retaining poised, although not but satisfied of an additional upside leg simply but.
All that now comes all the way down to the Fed and the way they lay down the regulation in the present day, with the bond market response additionally one to observe specifically.
For my part, it will be powerful for the Fed to be extra hawkish than they already are. However the least that they’ll do is to keep up the identical stage of hawkishness that we’ve got noticed previously few weeks, which have led to the rout within the bond market and a broader greenback rally usually.
The important thing stage to observe for Treasuries is the three% mark in 10-year yields. If we blow previous that, that ought to assist to solidify the latest greenback momentum and set off the subsequent upside leg in USD/JPY.
As we glance to consolidate above the 130.00 stage, the 135.00 stage is the subsequent key determine to observe upon such a breakout.
For now, that is all conjecture. All of it comes all the way down to the Fed later in the present day. Tick tock, tick tock.