USD/JPY intermarket: yen softer as US yields recover and Wall Street bounces

• USD/JPY rallies as Wall Street bounces.
• USD/JPY needs to get above 114.38/49.

USD/JPY has made marginal gains on the session with a bounce on Wall Street. Currently, USD/JPY is trading at 113.65, up 0.11% on the day, having posted a daily high at 113.73 and low at 113.24.

The benchmarks are making tracks to the upside and reversing early losses which have taken the steam out of the yen for the start of this week. USD/JPY dropped from the 114 handle last weekend and tested the commitments from the bulls just a few pips shy of 113 the figure. The price is testing through the 100-hourly SMA at 113.60 as the ten-year yields drift up from the session lows of 2.3682% and DXY moves back above 94.50. 

USD/JPY bearish on a trend basis

Analysts at Scotiabank are bearish on the yen (JPY) in the short and longer run. "The Bank of Japan (BoJ) remains committed to its 2% inflation target but with domestic price growth still subdued (0.7% Y/Y in September), we expect monetary policy will remain relatively more accommodative than other central banks over our forecast horizon. We forecast the JPY to lose ground against its primary currency peers on a trend basis as a result."

USD/JPY levels

USD/JPY spent last week easing lower from the top of the range at 114.38/49 (May and July highs and the 2015-2017 downtrend) and is currently easing lower, noted analysts at Commerzbank. "It has eroded the short term uptrend and the near term risk is for a deeper retracement to 112.18/111.76 (the 200 day ma and the 55 week ma). Ideally this will hold, while above here an upside bias will persist. A close above 114.58 will introduce scope to the 118.60/66 January high. Where are we wrong? The 55 day ma guards the 109.55 midSeptember low and in turn this support guards the 108.81/13 April and June lows as well as the September low at 107.32," the analysts added.

EUR/JPY: en-route for 134.58 November 2015 high? - Commerzbank