USD/JPY peeps above 113.00 as 10-yr yield sits above 200-DMA

The US dollar found some love in Asia, pushing the USD/JPY pair to a session high of 113.02 levels.

Caution ahead of the Japanese general elections to be held later in the month and the uptick in the treasury yields is keeping the USD well bid.

The US 10-year treasury yield rose to a three- month high of 2.371% on Monday after a measure of US manufacturing activity surged to a 13-1/2-year high last month. The yield currently trades around 2.346%, i.e. well above the 200-DMA level of 2.324%.

Risk Reversals show dollar puts are more popular

The one-month 25 delta risk reversal stands at -1.875. The negative reading indicates the put options are more popular than the calls.

USD/JPY Outlook

Kathy Lien from BK Asset Management writes, "the beginning and end of the month/quarter are always tricky to trade, but this week could be a challenging one for the greenback with non-farm payrolls expected to come in much lower.  However, between now and then, the market clearly prefers dollars over other currencies and as long as yields and stocks continue to rise, so will USD/JPY." 

USD/JPY Technical Analysis

FXStreet Chief Analyst Valeria Bednarik writes, " The pair is in a consolidative phase with the bullish trend holding in the background. In the 4 hours chart, technical indicators continue to be stuck around their mid-lines, but the price remains above a strongly bullish 100 SMA, which now advanced up to the 111.60 region. The pair topped at 113.25 last week, the level to surpass to confirm another leg higher, which can extend up to the critical 114.40 region during the following sessions."