After sliding to 95.60 in late-Asia/early-Europe, USD/JPY has been on the mend for much of the US session. Risk aversion is easing somewhat as the swine flu outbreak spreads but at a less alarming rate than some had feared.
US equities have been able to shrug off the flu-fears as well as fresh contagion in the banking sector, a sure sign of strength. Rising interest rates are a factor as well, as 10-year notes hit a 3.0% yield.
Upbeat consumer confidence, a rebound in the Richmond Fed survey and a slowing in the rate of decline in house prices have also helped dial back risk aversion and buoy the USD/JPY and JPY crosses.
96.90 and 97.50 are resistance levels for USD/JPY should the rebound extend.
