USD/JPY retreats from tops, back near 114.60

After reaching fresh highs in the vicinity of 115.00 the figure, USD/JPY has now receded to the 114.65/60 band.

USD/JPY sustained by US yields

Spot has advanced to fresh 3-week tops just below the 115.00 handle in tandem with the better tone in US yields, with the 10-year reference now deflating to the 2.56% after climbing to peaks near 2.59% earlier in the session.

Rising bets on further tightening by the Federal Reserve at the March meeting remain the exclusive driver behind the up move in the buck, with Reuters now seeing the probability of a 25 bp rate hike at nearly 90% based on Fed Funds futures prices.

Additionally, recent solid results from the US ADP report on Wednesday have added to a potential positive surprise at tomorrow’s US Non-farm Payrolls in February (190K exp.), all collaborating with the rising optimism around the buck.

Later in the session, US Initial Claims are due seconded by Export/Import Prices for the month of February.

USD/JPY levels to consider

As of writing the pair is gaining 0.18% at 114.58 facing the initial hurdle at 114.94 (high Mar.9) ahead of 115.09 (50% Fibo of the 2017 drop) and then 115.62 (high Jan.19). On the flip side, a breakdown of 114.36 (55-day sma) would aim for 113.58 (low Mar.8) and finally 113.54 (20-day sma).