USD/JPY to extend the rally on a break above 105.75

USD/JPY trades around 105.60, as the benchmark yield on the 10-year Treasury note hit 1.20%, a level that was last seen in March 2020. The pair needs to break through the monthly high of 105.76 to see further gains, Valeria Bednarik, Chief Analyst at FXStreet, briefs.

Key quotes

“Financial markets are optimistic amid hopes for a large US stimulus package and progress in the global battle against COVID-19. Vaccine immunization remains sluggish amid production issues but progressing. Over the weekend, Israel announced it discovered a promising drug to cure severe cases.”

“USD/JPY has additional room to go, according to intraday technical readings. The pair reached a 2021 high of 105.76, with further gains likely on a break above it.”