USD/JPY inter-market: Targets 101.00 amid rebound in VIX?

The bullish momentum behind the USD/JPY pair found extra legs during the mid-NY session on Wednesday, as a sudden risk-on wave gripped the markets, after reports hit the wires that the OPEC clinched an output cut deal at its meeting in Algeria, marking the first deal in eight years.

From there, there was no turning back and the dollar-yen pair extended its overnight risk-on rally into Asia and early Europe on Thursday, finally printing fresh weekly highs at 101.75. The major closely tracked strong performance on the US and Asian equities, while the CBOE VIX (volatility index), a risk-barometer, nose-dived to the lowest levels in three days at 12.24, which further supported the upmove in the prices.

However, the major quickly faded the brief spike to weekly tops post-European open and now gradually breaks lower towards 101 handle, as we progress into mid-Europe. This latest leg lower is mainly driven by a minor-rebound in the VIX, now at 12.50 levels, indicating deterioration in the risk conditions. Also, a sharp drop in the Fed fund rate futures from the peak of 152.60, exerted downward pressure on the prices.

Attention now turns towards the US GDP data and a slew of Fed speaks due later in the NA session. While the Japanese CPI figures will be also closely eyed for fresh moves in the USD/JPY pair.