USD/JPY takes-out 108 handle as 10-yr Treasury yields near 3% mark

• Tracks the relentless rise in Treasury yields, 10-year yields at striking distance of 3%.
• DXY hits fresh 5-week highs on monetary policy divergence, eyes US data.

The USD/JPY pair accelerated its bullish momentum and finally surpassed the 108 crucial resistance in the European session, now flirting with fresh 10-week tops of 108.04.

The ongoing rally in the spot gained traction after the US dollar caught a fresh bid wave across its main competitors in tandem with Treasury yields, especially after the 10-year yields arrived a touching distance of the 3 percent key figure.

It’s worth noting, the last time yields neared this number in 2013 it rocked risk appetite and sent stocks sliding. It also came shortly before oil prices went on a mighty 75 percent tumble, as cited by Reuters.

Looking ahead, the pair will keep a close eye on the USD dynamics and Treasury yields’ rally, as attention turns towards the US economic release due later in the NA session.

USD/JPY levels to watch

Slobodan Drvenica at Windsor Brokers Ltd noted: “Break above 108 handle would open pivotal barrier at 108.25 (Fibo 61.8%), break of which would signal further recovery and bring in focus targets at 109.01/31 (falling 100SMA/top of thick daily cloud).
Bullish daily techs remain supportive, however, bulls may show hesitation at 108 barrier. Rising 10SMA which tracks the ascend since late Mar marks solid support at 107.27, which is expected to hold dips and keep the bullish structure intact.”