10-year Treasury yields are continuing the rebound from yesterday and so is USD/JPY at the moment. The former is now up by 4.8 bps at the highs for the day, at 4.126%. And that is giving a lift to the latter with the currency pair now up 0.4% to 143.85. It won't be long now until we start to hear some more verbal jawboning by Japanese officials again.
The solid rebound in USD/JPY yesterday was encouraging for buyers, especially since they are continuing to hold price action above the 142.00 mark. That keeps open the space to roam towards the end-June and early-July highs near 145.00, where we saw the rally since April stall.
That will once again be a pivotal mark as traders continue to try and figure out where the threshold lies for the BOJ in the JGB market. 10-year Japanese bond yields appear to be pushed back at around 0.65% today but that is some added leeway already from Monday at around 0.60%.
In any case, the yen currency itself is not convinced by the BOJ's latest actions and the price action is telling. We'll see if USD/JPY buyers have the appetite to go beyond 145.00 this time around and I reckon they will at least have more incentive to do so now that we have moved past the July decision.
