USD/JPY a little lower on the day, keeping at 110.63
The pair is contesting daily resistance around 110.60-70 currently with the August high at 110.80 also adding to that in limiting any further upside potential since the latter stages of last week i.e. when Treasury yields broke higher.
Gains are being kept in-check now with Treasury yields a touch lower on the day but the chart for the latter is showing that this is perhaps a bit of a breather rather than a stop to the upside breakout in yields.
As such, expect USD/JPY buyers to keep poised in trying to break the resistance region pointed out above as they await further backing from the bond market.
So far today, 10-year Treasury yields are down 1.5 bps to 1.445% but unless yields fall back below 1.40% and its 200-day moving average (purple), the odds are siding with a further extension higher as we look towards things later this week.
Going back to USD/JPY, a break above the 110.60-80 resistance region opens up the path towards retesting the year's highs at 111.64-66 again before 112.00 becomes the next key target for buyers.
