USD/JPY extends gains to 114.50 on Yellen

The US dollar rose further across the board extending the rally that started with the initial testimony of Janet Yellen before the Senate Banking Committee. 

USD/JPY printed a fresh daily high at 114.47, hitting the strongest level in two weeks. Then pulled back modestly and is trading at 114.20/30, up 50 pips for the day. All gains came with Yellen speech. Before her testimony, the pair was trading near 113.50.

The Japanese currency weakened in the market as US bond yields soared. The 10-year bond yield rose from 2.435% to 2.499%, the highest level for the current month. 

Chair Yellen said that waiting too long to raise rates is “unwise”. Her words pushed Fed rate hikes expectations to the upside. 

Technical levels 

The rally of USD/JPY eased near the 114.50 area. If it breaks above, resistance levels could be seen at 114.75/80, followed by 115.00 (psychological) and the strong 115.35/45 zone, that has been a barrier since Trump’s inauguration. 

Support levels might now be located at 114.15 (Feb 13 high), 113.20/25 (daily low) and 112.85 (Feb 13 low).