USD/JPY drops for the first time in eight days after hitting highest levels since October 2020

USD/JPY dropped for the first time in eight days after hitting its highest levels since October 2020.
The US dollar fell following downbeat NFP data, but yen was weighed by higher US yields and risk on.

USD/JPY posted its first day in the red in eight, after the USD slumped to the bottom of the G10 FX performance ranking following a not so stellar January NFP report. Prior to the data, the pair had advanced above the 11 November 2020 high at 105.677 to hit highs in the 105.70s (the pair’s highest levels since October 2020), but then sharply reversed lower into the 105.30s, where it currently trades now. The pair closed Friday trade with very mild losses on the day of around 0.1% or slightly more than 10 pips. On the week, the pair is still up more than 0.5%.

Driving the day

As noted, a key reason for Friday’s reversal from highs in the 105.70s back to the 105.30s in USD/JPY was as a result of the US dollar’s post NFP data slump. However, compared to the losses it saw against most of the rest of the G10 currencies, USD’s losses on the day versus the JPY was comparatively modest.

One immediate observation is that US bond yields saw a substantial rally, further widening the US/Japanese rate differential in favour of the US dollar, thus offering some support to USD/JPY; the US 10-year yield gained 3bps to move to just shy of 1.17%. The Japanese 10-year was unchanged at around 0.05%, meaning the US 10-year/Japan 10-year differential widened to about 112bps from previously under 110bps.

Another factor capping the yen’s potential upside on Friday was the fact that it just really wasn’t a good day for safe havens; stocks continued to rally, crude oil was higher and, with the US dollar on the back foot, industrial metals came roaring back. In FX, it was largely the more risk-sensitive currencies that performer the best. The same themes that have been driving risk on all week were again in play; stimulus, economic recovery, vaccine and pandemic hopes. This was not a good recipe for the yen.

USD/JPY

Overview
Today last price	105.38
Today Daily Change	-0.17
Today Daily Change %	-0.16
Today daily open	105.55

Trends
Daily SMA20	104.14
Daily SMA50	103.88
Daily SMA100	104.4
Daily SMA200	105.59

Levels
Previous Daily High	105.56
Previous Daily Low	104.98
Previous Weekly High	104.94
Previous Weekly Low	103.56
Previous Monthly High	104.94
Previous Monthly Low	102.59
Daily Fibonacci 38.2%	105.34
Daily Fibonacci 61.8%	105.2
Daily Pivot Point S1	105.16
Daily Pivot Point S2	104.77
Daily Pivot Point S3	104.57
Daily Pivot Point R1	105.75
Daily Pivot Point R2	105.95
Daily Pivot Point R3	106.34

Share: Feed news

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.