USD/JPY off highs, still firm above 114.00

The upside momentum stays well and sound around the greenback, now pushing USD/JPY back above the 114.00 handle.

USD/JPY up move backed by US yields

Spot is advancing for the fourth straight session so far, rebounding from Tuesday’s lows in the 111.70/65 band and managing to regain tops above 114.00 the figure, levels last seen in mid-February.

The up move has scope to test the 55-day sma, today at 114.70, as the lack of events and publications should leave the pair’s price action to the USD-dynamics, which stay pretty solid for the time being.

Yields in the US money markets remain the exclusive driver for the pair’s direction in the foreseeable future, recently boosted by increasing expectations of a Fed move at the March meeting. Currently, CME Group’s FedWatch tool is placing the probability of a rate hike later this month at just above 66%, almost doubling the previous day’s reading.

Looking ahead, US Initial Claims and Challenger Job Cuts will be the only releases today in the US docket, ahead of Friday’s key inflation figures in Japan and the speech by Chairwoman J.Yellen on ‘Economic Outlook’.

USD/JPY levels to consider

As of writing the pair is gaining 0.41% at 114.20 facing the initial hurdle at 114.67 (55-day sma) ahead of 114.97 (high Feb.15) and then 115.62 (high Jan.19). On the flip side, a breakdown of 113.09 (20-day sma) would aim for 112.12 (100-day sma) and finally 111.67 (low Feb.28).