Treasury yields pull USD/JPY pair above 102.00

Treasury yields are back in green and that is helping USD/JPY regain ground above 102.00 handle. The strong correlation between weak Yen and Japanese stocks has also helped Nikkei erase losses.

Supported by 101.75

The pair clocked a low of 101.75 earlier today before following the treasury yields higher. The 2-yr yield, which mimics short-term rate rise bets, fell five basis points in the North American session after the data released showed savings rate in July rose for the first time since March.

However, the two-year yield regained bid tone is now trading more than one basis point at 0.821%. Moreover, the pair is lagging the post Brexit recovery in the two-year yield.

USD/JPY Technical Levels

At the time of writing, the spot was trading around 102.20 levels. Acceptance above 102.69 (50-DMA) could yield a test of 103.55 (June 16 low). A violation there would open doors for 103.99 (July 26 low). On the other hand, breakdown of Asian session low of 101.75 would expose 101.36 (5-DMA). Further losses could run into strong support of 100.71 (50% Fibo of 2011 low – 2015 high).