<p style=““ class=“text-align-justify“>The dollar was weaker across the board coming into European trading but higher bond yields helped to underpin USD/JPY to push higher at the start of the session, with the pair moving up from 131.65 to a high of 132.65 before easing slightly in the past 15 minutes or so. In the bigger picture, the pair is coming off a push lower on Friday after testing the late December highs near 134.50 – after having bounced off 130.00 last week:</p><p style=““ class=“text-align-justify“>In a sense, one can argue that price action is consolidating in between the levels highlighted as buyers and sellers continue to do battle. On a day when the dollar seems to be running lower across the board, USD/JPY is bucking the trend so that tells us that the playbook isn’t so straightforward.</p><p style=““ class=“text-align-justify“>The bond market remains a key driver as well and 10-year Treasury yields are up 2.6 bps to 3.597% on the day. Be mindful that Japanese markets are closed today and will resume trading tomorrow with a keen focus on 10-year Japanese government bond yields as well, after having tested the BOJ’s limit at the end of last week <a target=“_blank“ href=“https://www.forexlive.com/news/boj-being-tested-once-again-20230106/amp/“ target=“_blank“ rel=“follow“>here</a>.</p><p style=““ class=“text-align-justify“>Going back to USD/JPY, here is a look at the near-term chart:</p><p style=““ class=“text-align-justify“>Sellers managed to seize near-term control on a break below the 100-hour moving average (red line) in early trading today but buyers have turned it around to switch the near-term bias to being more bullish again in European trading. That comes after a break back above both the 100 and 200-hour (blue line) moving averages.</p><p style=““ class=“text-align-justify“>The state of flux in the near-term control highlights that price action is still rather unsettled and that is arguably exemplified by the consolidation between 130.00 and 134.50 (you can even call it 135.00) for the time being.</p><p style=““ class=“text-align-justify“>As the pair continues to toss and turn, eventually we’ll see it fall off on one side and that will make for a good trending move to catch. And we might not have to wait too long for a trigger with the US CPI data coming up on Thursday.</p>

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