USD/JPY climbs to highest since Friday above 109.50 as USD reverses

• Dollar gains momentum across the board as US yields rebound.
• USD/JPY: from testing weekly lows to five-day highs in a few minutes.

The USD/JPY reached the highest level since Friday at 109.64, after rebounding sharply. The pair was testing the weekly low near 109.20 and reversed sharply as US bonds moderated their rally.

Dollar gains momentum as yields rebound ahead of CPI

The greenback hits fresh highs versus most of the G10 currencies during the American session. Still the euro and the yen are the top performers. The DXY rose from 89.81 to levels above 90.00, as US yields move off lows.

The US 10-year yield rose from 1.47% (lowest level since March) to 1.50% and boosted the US dollar. The move takes place as market participants await the CPI data to be released on Thursday.

Equity prices in the US are mixed. The Dow Jones drops 0.01% and the Nasdaq gains 0.12%. The yen is mostly lower in the market, after the USD/JPY rally.

From a technical perspective, if the USD/JPY breaks and holds clearly above 109.60 it would likely clear the way to more gains, targeting the next resistance at 109.85. Still, until US inflation data, moves are likely to remain vulnerable.

Technical levels