USD/JPY turns positive as JGB yields spike

USD/JPY is trading marginally positive on the day as the JGB sell-off and the resulting rise in the bond yield weighed over the Japanese Yen.

Rising yield negative for Yen

Spike in yields is negative Yen given the nation is riddled with massive debt. Japanese government bond (JGB) sell-off gathered pace in Asian session, pushing the yields on long duration treasury yields to near six month high.

Consequently, the Dollar-Yen pair recovered from the low of 103.13 to trade around 103.33 levels. The focus remains on the US non-farm payrolls and wage growth figures release.

USD/JPY Technical Levels

A break above 103.53 (Wednesday’s high) would expose previous day’s high of 103.99 (July 26 low). Acceptance above the same could bring in fresh bids and open doors for 105.36 (100-DMA). On the other hand, a break below 102.97 (5-DMA) would shift risk in favor of a drop to 102.65 (50-DMA + Aug 8 high) and 102.27 (Aug 12 high).