USD/JPY JUMPS TO 132.70 AMID A STRONGER US DOLLAR

Highlight

• US Dollar soars across the board after US data.

• Equity prices in Wall Street reversed sharply, post important losses.

• USD/JPY hits two-day highs, fails to consolidate above 132.50.

The USD/JPY rose to 132.73 after the beginning of the American session and following the release of US economic data. It then pulled back finding support above 132.15.

So far, the pair has been rejected from above 132.50. A consolidation above the mentioned level would strengthen the US Dollar. On the flip side, a break under 131.50 would expose 131.00.

DOLLAR UP AFTER DATA

Economic data released in the US on Thursday showed the economy expanded at an annualized rate of 3.2% during the third quarter, above the 2.9% of the previous estimate. Price indicators were also revised higher. Initial Jobless Claims rose to 216K below the 222K of market consensus while Continuing Claims fell for the first time in weeks from 1.678 million to 1.672 million.

US figures came in above expectations and triggered an intraday rally of the US Dollar and a decline in equity and bond prices. The Dow Jones extended losses, a few minutes after the opening is falling by 0.96% and the Nasdaq tumbles by 1.75%. The Japanese Yen received some support from the deterioration in market sentiment and printed fresh highs against currencies like the Aussie and the Kiwi.

The key move for the USD/JPY came from the bond market. Treasury yields rose to fresh daily highs boosting the pair. The US 10-year bond yield climbed from 3.64% to 3.69% while the US 2-year yield soared from 4.20% to 4.26%.