The USD/JPY pair is experiencing further upside momentum due to two key factors: the disappointment stemming from the Bank of Japan (BOJ) and higher Treasury yields. This has resulted in the USD/JPY pair testing the 149.00 level for the first time since October of the previous year. The next target is the 150.00 mark, and it will be interesting to see if Japanese authorities will intervene once again at this level.
One of the primary drivers behind this upward movement is the higher Treasury yields, with 10-year Treasury yields currently at 4.55% – their highest level in 16 years. This breakout from last week is still ongoing, and it is difficult to foresee when it will stop unless there is a shift in broader market sentiment. Furthermore, aside from month-end flows, there is no significant economic data that is expected to cause any major disruptions, which means the dollar could continue to benefit from this tailwind in the upcoming sessions.
In conclusion, the combination of disappointment from the BOJ and higher Treasury yields has propelled the USD/JPY pair to new heights. The next target is the 150.00 level, and it remains to be seen if there will be any intervention from Japanese authorities. With 10-year Treasury yields at their highest level in 16 years, it is difficult to predict when this upward momentum will halt unless there is a shift in broader market sentiment. As for economic data, aside from month-end flows, there is no major catalyst expected, indicating that the dollar could continue to benefit in the near future.