Higher Treasury yields and less dovish Fed pricing has certainly helped with the pair’s recovery since Friday, with price now climbing back above 134.00 to its highest levels since 15 March last month.

Of note, the pair is hoping to crack through resistance from the 50.0 Fib retracement level of the swing lower in March, seen at 133.77, after the break above the 100-day moving average (red line) again at the end of last week.

That tees up a potential push towards 135.00 next, before buyers might reassess for any move back towards the 200-day moving average (blue line) – now seen at 137.12. The latter is a key level which helped to stop gains last month, all before the banking turmoil engulfed the market landscape.

All eyes will stay on the bond market though and for now, it doesn’t look like 10-year yields in the US are going to threaten a break lower under the key threshold near 3.30%. The banking crisis has ebbed and if traders start to come around to the idea that the Fed is indeed going to hold rates higher for longer, that’s an upside boon for USD/JPY.

This article was written by Justin Low at www.forexlive.com.