BOJ governor Ueda's remarks were a driving factor for price action on Tuesday but the rest of it has been dictated by movements in the bond market. And that hasn't been too helpful for USD/JPY direction this week. Treasury yields have also chopped around and the action yesterday was a good example of that.
Yields were initially lower but recovered strongly in US trading with 10-year yields rising to a high of 4.19%. It is now down 2 bps to 4.158% but overall, still keeping above the 200-day moving average of 4.10%. I would say that remains the key line in the sand for the bond market.
In turn, USD/JPY has seen back and forth action but is keeping above its own 100-day moving average (red line) at the balance.
![USDJPY](https://images.forexlive.com/images/USDJPY_id_30a4cb0f-a735-40c6-8e09-66037b3a87f2_size900.jpg)
The key technical level is seen at 147.51 and as the upside momentum to start the new year hinges on price staying above that. The near-term picture tells a more complex story this week though. Buyers and sellers are battling it out with price action now sitting in between key technical levels.
The 100-hour moving average is seen at 147.93 while the 200-hour moving average is seen at 147.46. The spot price is sitting in between that, highlighting a more neutral near-term bias currently.
If anything, the more up and down but sideways action in USD/JPY this week is a reflection of the moves in the bond market as well.
I would argue that the technicals are now the best guide in deciphering what may come next for both Treasury yields and USD/JPY, as defined by the levels above. But if there is any takeaway, it is that USD/JPY continues to be tied closely to the bond market for now.