USD/JPY: US 10-year real yields above 1.50% supports the upside – OCBC

On the first day of a big week, USD/JPY drops towards 110.50 amid falling yields. Nevertheless, strategists at OCBC Bank still favour the USD against the JPY as the dollar probably draws positive support on net from the yield space.

USD/JPY to be bought on dips towards 110.50/60 

“110.50/60 limited downside moves, with 111.00/20 capping bounces.”

“Should the 1.50% hold up for the 10y UST yield, it will be a positive lead for the pair.”

“Prefer to buy the USD/JPY pair on dips towards 110.50/60.”