USD/JPY rally up to 111.20/30 resistance as dollar stays on top

Currently, USD/JPY is trading at 111.23, up 0.17% on the day, having posted a daily high at 111.29 and low at 110.98.

Forex today: Aussie leads, US yields drop but dollar robust on Fed speak

USD/JPY is on the march in Tokyo extending the gains from overnight up to the 111 handle and now with a look in at the 111.20 resistance. The dollar has performed robustly despite yields in the US taking a hit on the ECB news revoking the hawkishness of late driving European and US rates lower. The mood has otherwise been risk-on and that has not been too kind to the yen. 

Intermarket VIX: a safe ride for risk-on markets, or is it?

In respect to the yen and Japan, the Japanese economy was growing at a rate of 1.0% in Q4 and that is the fourth consecutive quarter of above-trend growth. However, this is beside the point. What is more crucial is the weak inflation outlook. This will continue to leave scope for the BoJ to maintain its current loose policy stance and that will remain a problem for the Yen bulls. We look forward to this data tomorrow.

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the intraday outlook for the pair is modestly positive, given that in the 4-hour chart, the Momentum indicator holds within positive territory with no certain directional strength. "In the longer run, however, the upward potential seems limited as in the same chart, the price is well below its moving averages. The bearish strength may ease on a recovery above 112.00, but it will take an extension beyond 114.50, too far away at this point, to talk about a bullish USD/JPY."