The yield-sensitive USD/JPY is well supported this afternoon after having overcome 94.00 offers. One factor supporting the pair is a continued rise in US Treasury yields. Rates are higher for the right reasons this week; prospects for economic growth are pushing rates up, not fears that the dollar will be dumped by China and other creditors.
Late last week we were around a 3.25% yield in the 10-year note; today we stand at 3.57%.
Yields could be volatile later this afternoon after the FOMC releases the minutes of its June meeting. New economic forecasts are expected and traders will keep their eyes peeled for any talk of extending the controversial quantitative ease policy. Conversely, talk of exits strategies could support bond prices and cut yields. Minutes are due at the top of the hour.
94.65/70 is next resistance for USD/JPY, with more at 94.85.
