USD/JPY moves above 114.00 ahead of FOMC

• Spot re-tests 114.00 on better US yields.
• US 10-year yields approaching critical 2.40% level.
• ISM, FOMC on sight later in the NA session.

The greenback is up for the second consecutive session vs. its Japanese peer on Wednesday, motivating USD/JPY to retake the 114.00 handle and print fresh 3-day highs at the same time.

USD/JPY now looks to FOMC

After finding decent support around the 113.00 handle – coincident with the 21-day sma – the pair managed to leave behind Monday’s weakness and gain around a cent to the current 114.00 neighbourhood.

The up move in spot comes along with a healthy rebound in yields of the key US 10-year benchmark, which are once again hovering over the critical 2.40% handle after bottoming out in sub-2.36% area yesterday.

The pair should stay under scrutiny in the next couple of days in light of today’s publication of the US ISM manufacturing followed by the FOMC meeting, Fedspeak on Thursday and Friday and October’s non-farm payrolls and the ISM non-manufacturing on Friday.

USD/JPY levels to consider

As of writing the pair is gaining 0.34% at 114.05 and a break above 114.45 (high Oct.27) would open the door to 114.51 (high Jul.11) and finally 115.51 (high Mar.10). On the other hand, the immediate support emerges at 112.97 (low Oct.31) seconded by 112.77 (23.6% Fibo of 107.33-114.45) and then 111.74 (200-day sma).