USD/JPY has made a new high around 89.93, fueled by firmer US bond yields and anticipation of a more hawkish Fed come 2010. Stops in the 89.85 area have been triggered but so far the market has been unable to overcome offers in the 90.00/10 area from Japanese exporters. Clearing that area of congestion will open a retest of the 90.70 level.
With EUR/USD weakness leading the greenback’s recovery, EUR/JPY sales may hamper USD/JPY rallies, traders say. Looks like EUR/USD is the market’s preferred way to play dollar strength near-term.