USD/JPY Above Y116.00

USD/JPY last deals a handful of pips above closing levels, printing ~Y116.20.

• To recap, the continuation of the cheapening in the longer end of the U.S. Tsy curve (higher yields) witnessed on Tuesday added to the upward impetus established in Tokyo, dragging the rate above the next technical resistance level. A pullback from extremes in Tsy yields then allowed the rate to ease from best levels of the day, but it still managed to close above Y116.00 for the first time since Jan ’17.
• Our technical analyst now flags the 2.00 projection of the Apr 23 - Jul 2 - Aug 4 price swing (Y117.08) as the next notable level of technical resistance, with Tuesday’s high (Y116.35) providing some protection.
• Tokyo reaction to the move will be eyed, with little in the way of notable data releases apparent during the Asia-Pac session. U.S. ADP employment data and the minutes from the Fed’s most recent monetary policy decision provide the major events when it comes to Wednesday’s broader docket.