The Dollar/Yen inched higher as the yields on the US 10-year and the 2-year treasury recovered and stabilized, having hit a record low yesterday. Meanwhile, the anti-risk Japanese Yen is on the defensive seemingly due to the 10-year Japanese government bond yield's drop to three-year lows and the rise in US equities. Looking forward, the yields may continue to rise, keeping the USD/JPY pair better bid. After all, an above-forecast US data released yesterday assured investors that Americans are spending enough to keep the economy from falling into a recession.
The Yen bulls are losing momentum as the pair starts trading above the 50-day moving average, signaling a possible short-term bullish recovery. 106.80 is the level needs to be broken by the Dollar bulls to tilt the market sentiment towards the buyers by confirming further gains. The bears on the other hand, need to break below 105.80 to regain control.
Support: 105.80 / 105.50
Resistance: 106.30 / 106.80