USD/JPY hits six-day highs near 144.00 as US yields soar

  • Japanese yen weakens amid a Treasury sell-off.
  • Market participants are looking at the FOMC meeting, Fed is set to raise rates by 75 bps.
  • USD/JPY with a bullish bias in the short term.

The USD/JPY rose from under 143.00 to 143.92, reaching the highest level in almost a week as US yields jumped on the day the two-day FOMC meeting started. At the same time, stocks in Wall Street were falling by 0.85% on average.

Dollar strengthens ahead of the FOMC

The US 10-year bond yield jumped to 3.59%, hitting levels not seen since January 2011.  European bond yields also rose. The decline in bonds weakened the Japanese yen, that dropped across the board during the American session.

The greenback printed fresh daily highs and then moved off highs. The DXY peaked at 110.27, the highest level since September 7 and then pulled back toward 110.00.

US economic data released on Tuesday came in mixed, with a sharp gain in August Housing Starts and a decline in Building Permits. The focus is on the Federal Reserve, that is expected to announce on Wednesday a 75 basis points rate hike. Prices are moving mostly sideways, on a wait-and-see mode ahead of the key event.

The USD/JPY is moving with a bullish bias, currently holding above the 143.50 support area. Above the next barrier is seen at 144.40. On the flip side, the 142.75/85 zone is the critical short-term support area.

Technical levels

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