The dollar regained its composure towards month-end and quarter-end trading on Friday and to start the new week, higher bond yields are likely to keep the greenback steadier. 10-year Treasury yields are up 4 bps to 4.612% and that is underpinning USD/JPY in particular with the pair now within touching distance of the 150.00 level:
USD/JPY daily chart
The last time we were here was back in October last year and that prompted Japanese officials to intervene to prop up the yen for the first time since 1998. The threshold this time around might be a little higher but I wouldn’t discount the possibility of Tokyo stepping in at the same mark, although they likely need to coordinate this with a change in BOJ communique.
In any case, the dollar remains in a solid position overall still with EUR/USD keeping below 1.0600 and USD/CAD pushing back upon a test of its key daily moving averages just above 1.3400 to keep at 1.3580 now. AUD/USD also continues to be pulled lower upon multiple tests of the 0.6500 level and that continues to side with sellers (dollar buyers) for now.
But as we get the week going, USD/JPY is the big one to watch with bond yields also continuing to hold higher after news that the US government has averted a shutdown here.