USD/JPY has burst through stoploss buy orders above the 90.50 level as rising US rates exacerbate a short squeeze.
As Sean pointed out in Asia overnight, it is now the JPY that has been pared with the dollar as the market’s currency whipping boy. Wild deficit spending in Japan, comments from the increasingly bi-polar FinMin Fujii that he never said a strong JPY was good for the economy and improved US economic data are all helping give the buck a lift. The firm data has seen the US 10-year note yield rise to 3.47%, up 30 bp in the last week.
Medium-term types are targeting the 38.2% retracement of the drop from 97.70 with the buck apparently putting in a short-term technical bottom.
