10 year did sale was not the best...
As Adam points out, the USDJPY trades back at the high for the day at 114.17 after lackluster demand for the 10 year notes. The pair is not racing but we are trading and staying above the 114.00 level (see prior post). Yesterday's high moved to 114.326 and is the next target. The 61.8% of the move down from the December high comes in at 114.633 and is another target now.
What would keep the bulls running in the USDJPY?
Well,the answer may have to come from the 10 year note.
The 10 year yield bottomed in April at the 2.1629% level. The high yield yesterday reached 2.4141%. Today the high reached 2.4050% so far. Looking at the daily chart below, the 100 day MA comes in at 2.4160%. So far that MA is keeping a lid on the topside in the note.
The USDJPY has been paying attention to rates and the 10 year has been a fairly good proxy. If the 10 year yield starts to trade back above the 100 day MA, I would expect the USDJPY would benefit too.
The USDJPY is above the 114.00 level and holding. Will it stay above and move higher from here? That may be answered by what happens in the 10 year bond yield. It is a key time for both instruments.
