After Monday's sharp drop, USD/JPY saw a solid rebound yesterday and that is continuing today as Treasury yields are also bouncing back.
10-year yields are up by nearly 4 bps to 1.245% and that is helping to provide the market with some comfort as risk sentiment stabilises after the jitters earlier in the week.
USD/JPY is also managing to keep a daily close above its 100-day moving average (red line) and the defense of the key level also bolsters the bounce we are seeing - at least from a technical perspective; not to mention the 61.8 retracement level holding.
The push back above 110.00 is encouraging as buyers are also managing to get past the key hourly moving averages @ 109.83 and 110.03 (100 and 200-hour moving averages respectively), keeping the near-term bias more bullish.
Tracing the drop since the start of the month, the 50.0 retracement level of that is @ 110.36 and a push above that will provide more conviction for any further extension of the upside momentum in the past two days.
Just above that will be resistance from the 13-14 July highs @ 110.65-70.