The high earlier today touched 134.55 before a bit of a retreat now back to 133.80, as we see buyers take some off the top with plenty of anticipation for moving towards 135.00 in USD/JPY.
The figure level remains the key point and it is in all likelihood a matter of time before we knock on that door, as has been the case previously with 120.00, 125.00, and 130.00 in the past few months. I outlined the technical argument here.
The slight pullback so far today could be a brief one but we'll also have to see how the mood music plays out later on with regards to the ECB.
European bond yields have pulled higher over the past few months in anticipation of a more hawkish tone by the central bank and there are certain quarters in the market expecting some potential hints about any 50 bps rate hike in July.
If we do see bond sellers get disappointed and yields drop, that could see USD/JPY hold slightly lower on the day. But as is the case previously, this should prove to be but a speed bump on the way up and I would expect dip buyers to come back in to bid up the pair in the hunt towards 135.00 next.
