USD/JPY rises above 109.00 as 10-yr UST yield clocks fresh 45-month high

• USD finds bids as T-yields rise to 45-month high
• USD/JPY runs into 1-hour 100-MA hurdle.

The bid tone around the American dollar has strengthened, possibly due to the rise in the US 10-year treasury yield to a fresh 45-month high of 2.73 percent.

The USD/JPY pair clocked a session high of 109.20 and was last seen trading at the 1-hour 100-MA level of 109.12.

The present oversold technical conditions in USD/JPY seem to have revived the positive correlation between the treasury yields and the currency pair. So, the spot could extend gains further if the yield continues its ascent in Europe and US.

However, demand for the Japanese Yen may rise if the equities react negatively to the rising yields. Thus, there is merit in being cautious.

USD/JPY Technical Levels

A 1-hour close above 109.12 (1-hour 100-MA) would open doors for a sustained rally to 109.77 (Jan. 25 high on 1-hour) and 110.00 (psychological level). On the other hand, a failure to hold above 10.00 (zero levels) could yield a drop to 108.60 (support on 1-hour). A violation there would expose 108.28 (recent low).