USD/JPY retreats after being rejected from above 113.00

USD/JPY erased gains after the beginning of the US session. The yen recovered some momentum in the market, amid a decline in equity prices. US yields remain at weekly highs, limiting the recovery of the yen. 

The pair earlier traded marginally above 113.00, after the release of US economic data but it failed to hold and pulled back modestly. Recently it fell to  112.65, to test daily lows.

Currently is trading at 112.75, slightly higher for the day, standing above the 20-hour moving average. The dominant trend remains clearly bullish. The 113.00 handle is becoming the key short-term resistance level to break. 

US supported ahead of NFP

Today’s US reports had a limited impact on financial markets. Jobless claims dropped more-than-expected to 238K, while factory orders rose 0.2% (below the 0.4% expected). The key data of the week will be released tomorrow: the Non-farm payroll report. 

The latest economic numbers from the US offered some support to the USD against the yen. Yesterday, the Federal Reserve, as expected, left interest rate unchanged. In the statement, the central bank said that the slowdown during the first quarter is “likely to be temporary”, leaving the doors wide open for a rate hike in June. The FOMC statement gave support to the US dollar and also pushed yields to the upside. The 10-year yield, that was below 2.30% before the Fed’s decision, today reached 2.36%, the highest in almost a month. 

US NFP set to bounce back in April