USD/JPY Intermarket: price through 115, plays catch-up on 10y to 2.61%

Currently, USD/JPY is trading at 115.14, up 0.18% on the day, having posted a daily high at 115.21 and low at 114.89.

USD/JPY has been playing catch up to the yields in the US overnight. USD/JPY has finally broken the 115 handle where exporters sell orders place around the psychological 115 handle finally gave way as we move through the financial year end. 

Worth noting, investors pay close attention to the spread between two-year U.S. and the Japanese government bond yields as well as the longer end of the curve, both of which have been widening. The 2y is now up to 1.3747 from the start of March's 1.2842. The 10-year has now breached the 2.61% mark, just shy of mid Decembers highs when the DXY was on the 103 handle. The dollar has climbed up to test the bear's commitments at 115.20 breaking the 15th Feb resistance at 114.95.  The move comes when the market pricing for a March hike firmed slightly overnight with the April Fed fund futures at 0.88% implying a 100% chance of a Fed rate hike next week. 

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the key is the Fibonacci support at 114.55, " a break below it will increase chances of a downward extension towards 114.15, while on the other hand, an advance on a strong US NFP report, will lead to an approach to the 116.00 region." 

Meanwhile, analysts at Commerzbank stated that a close above the 114.95 is needed to reintroduce scope to the key short-term resistance offered by the 16-month resistance line at 117.75, "...This remains our favoured view."