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The pair is benefitting from the surge in bond yields today, poised for a second straight day of gains this week. But the upside push earlier managed a high of 134.90 and that is just short of the critical resistance level of 135.00. That remains the key technical level to watch that is putting a lid on price action for the pair at the moment.
Despite Treasury yields also moving higher, we’re yet to see a convincing shift in the narrative as 10-year yields are seen at 2.875% now and still holding below its 100-day moving average at 2.89%. As such, USD/JPY sentiment remains tied to the bond market and what comes next in that regard.
For now, the mood is helping to keep the dollar a little underpinned though the greenback has seen gains ease up against the euro and pound to stay little changed on the session again.
All eyes will turn towards the US retail sales data later and the FOMC meeting minutes to see if there are more clues for markets to work with in the latter stages of the week.