Buyers want to reject the trend, looking for a new rise
The pair has risen slightly during the day, currently to 110.45, as 10-year government bond yields hold around 1.315% to launch European trading.
If the yield continues to rebound and remains above 1.30%, it will give yen pairs the impetus to look for a higher boost by the beginning of the week.
In the case of USD / JPY, buyers are waiting for the peak of 110.59 on July 23 as the next important resistance point. Pause above it and 13.-14. July records @ 110.65-70, a pair can be set for year highs to retest; this is the case if the bond market cooperates.
In any case, buyers are definitely catching up on a couple of recent trends – lower rises and lower ones – and this follows a similar narrative in Treasury returns.
Tomorrow’s US consumer price index data is the next major risk event on the agenda, and higher inflation will challenge the Fed’s patience to challenge Jackson Hole. The market should look to it so that the potential catalyst can move again this week.