USD/JPY surges to 1-1/2 week tops, closer to 110.00 mark

   •  BOJ acts to curb rising yields and prompts aggressive JPY selling.
   •  Modes USD rebound provides an additional boost.
   •  Bulls eyeing 110.00 mark as focus shifts to NFP. 

The Japanese Yen took a sharp knock across the board, lifting the USD/JPY pair to 1-1/2 week and back closer to the key 110.00 psychological mark. 

After an initial dip to 109.30 area, the pair caught some strong bids and turned higher for the third consecutive session following the BOJ decision to buy more long-term Japanese government bonds in order to curb a rise in yields. 

Today’s operations dampened market expectations that the BOJ might be leaning towards winding back stimulus and prompted some aggressive JPY selling pressure. 

Adding to this, a modest US Dollar rebound, backed by a continuous upsurge in the US Treasury bond yields, further collaborated to the pair's strong up-move to its highest level since Jan. 24. 

It would now be interesting to see if the pair is able to build on the bullish momentum as traders start repositioning for today's important release of the keenly watched US monthly jobs report, popularly known as NFP.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes, “the spot could test 110.00 levels ahead of the NFP, however, the 50-MA is still sloping downwards, so a sustained move higher looks likely only on the back of strong US wage growth number.”

“The pair could test weekly 5-MA hurdle currently seen at 110.65 if the US wage growth numbers beat estimates. On the other hand,  a weaker-than-expected print could yield a drop to sub-109.00 levels. However, bear revival is seen only below 108.28.”