USD/JPY pushes higher, 114.00 around the corner

The solid rebound of the greenback is now lifting USD/JPY closer to the 114.00 handle, or 8-week tops, on Tuesday.

USD/JPY up on US yields

Spot remains on the upside today following the continuation of the uptrend in US yields, with the 10-year reference hovering over the 2.39% level, last seen in early April and prolonging the bounce off YTD lows around the 2.17% area.

Positive Fedspeak as of late has been collaborating with the upside momentum in the buck in tandem with strong results from US Non-farm Payrolls during last month. Additionally, speculations of further tightening by the Federal Reserve at the June meeting stay on the rise, lending extra oxygen to the pair’s bull run.

According to CME Group’s FedWatch tool, the probability of higher rates next month is at nearly 88%, based on Fed Funds futures prices.

In the data space today, US NFIB index came in at 104.5 while the IBD/TIPP gauge is due later along with the JOLTs Job Opening figures. In addition, Minneapolis Fed N.Kashkari (voter, dovish), Boston Fed E.Rosengren (2019 voter, hawkish) and Dallas Fed R.Kaplan (voter, hawkish) are all due to speak later.

USD/JPY levels to consider

As of writing the pair is gaining 0.52% at 113.83 and a surpass of 113.93 (78.6% Fibo of 115.51-108.11) would open the door to 115.51 (high Mar.10) and finally 118.61 (2017 high Jan.3). On the other hand, the next support aligns at 113.13 (100-day sma) followed by 112.68 (61.8% Fibo of 115.51-108.11) and then 110.85 (low Apr.26).