USD/JPY consolidates gains above 114.00, eyes on US T-bond yields
- USD/JPY is fluctuating in a tight range above 114.00 on Monday.
- 10-year US T-bond yield is up more than 1%.
- Wall Street's main indexes look to open in the negative territory.
Following last week's impressive rally, the USD/JPY pair stays relatively quiet on Monday and stays in a consolidation phase below the multi-year high it set at 114.47 on Friday. As of writing, the pair was up 0.1% on the day at 114.32.
Rising US Treasury bond yields continue to fuel USD/JPY's upside. The benchmark 10-year US T-bond yield, which gained nearly 4% on Friday, is currently up 1.8% on a daily basis at 1.602%.
However, the cautious market mood is helping the safe-haven JPY stay resilient against its rivals and limiting USD/JPY's downside. Reflecting the souring sentiment, Wall Street's main indexes remain on track to open in the negative territory with US stock index futures losing between 0.2% and 0.3%.
The only data featured in the US economic docket will be September Industrial Production data. Nevertheless, investors are likely to ignore this report and remain focused on the US T-bond yields. Currently, the US Dollar Index is posting modest daily gains at 94.05.
USD/JPY near-term outlook
UOB Group analysts think that the pair could target 114.55 as long as it stays above the strong support level that is located at 113.00.
USD/JPY: Further strength remains in the pipeline – UOB.
Technical levels to watch for