USD/JPY refreshes seven-year high above 123.00 as risk reversals back BOJ’s JGB action

USD/JPY rises to the fresh high since December 2015, up 0.84% intraday heading into Monday’s European session as the Bank of Japan (BOJ) marks two offers to buy unlimited Japanese Government Bonds (JGBs).

Also supporting the yen pair’s upside momentum is one-month risk reversal (RR), a gauge of calls to puts. That said, the monthly print of the options market catalyst brace for the biggest positive print since April 2020, around +1.125 by the press time, suggesting the buyer’s firm outlook for the pair.

Additionally supporting the USD/JPY bulls is the risk-aversion wave that underpins the US dollar’s safe-haven demand, as well as strong US Treasury yields.

It should, however, be noted, that the yields ride on the hawkish Fedspeak but the latest US data have been mixed, which in turn suggests the need for a cautious move while looking forward.

As a result, this week’s US jobs report for March will be crucial for the USD/JPY pair.

Read: Breaking: USD/JPY rips to highest levels since 2016 on BoJ announcement