USD/JPY clinches fresh highs around 112.80

The greenback is posting moderate gains vs. its Japanese peer on Wednesday, lifting USD/JPY to fresh tops in the 112.80 area.

USD/JPY propped up by USTs

The pair is advancing to fresh multi-day tops closer to the 113.00 handle today, always bolstered by the up move in yields of the key US 10-year benchmark, which are gravitating around the 2.33% and gaining around 6 bps since Friday’s lows in sub-2.28% levels.

In the meantime, the renewed demand around the greenback has pushed the US Dollar Index (DXY) further north of the 93.00 handle to new 8-day peaks, as expectations of further tightening by the Federal Reserve, the likelihood of a hawk taking the helm of the Fed when J.Yellen finishes her term and optimism over Trump’s tax reform, are all supportive of a stronger buck.

Looking ahead and on the US data front, September’s housing starts and building permits are due seconded by the EIA’s report on crude oil inventories and speeches by Dallas Fed R.Kaplan (voter, hawkish) and NY Fed W.Dudley (permanent voter, centrist).

USD/JPY levels to consider

As of writing the pair is gaining 0.54% at 112.81 and a break above 113.44 (high Oct.6) would open the door to 114.39 (high May 11) and finally 114.51 (high Jul.11). On the other hand, the immediate support is located at 112.00 (23.6% Fibo of 107.33-113.44) seconded by 111.77 (200-day sma) and then 111.65 (low Oct.16).