USD/JPY up on the day but buyers face a stern technical test

The dollar might have surrendered gains elsewhere on the session but USD/JPY is proving to be an exception to that at least for now. The pair is up 0.5% to 152.15 currently and is keeping underpinned in European trading. There’s not much of a catalyst but Treasury yields also holding a touch higher is perhaps helping.

An interesting development since yesterday is Trump making a couple of comments about some issues with debt that Elon Musk’s “government efficiency team” has found. Trump said that:

“There could be a problem, you’ve been reading about that, with Treasuries. That could be an interesting problem because it could be that a lot of those things don’t count. Therefore maybe we have less debt than we thought of.”

It’s something to consider in the picture as the Bloomberg report suggested that Trump could even disregard some payments.

That could blow up into a real issue and with higher risk premiums potentially triggered, it could force market players to offload Treasuries. In turn, that’s a key driver to underpin yields and USD/JPY.

It’s all conjecture at this point. And I mean, it’s just Trump being Trump. But do keep an eye out here.

As for the technical side of things for USD/JPY, the pair might be trading up today but it’s not indicative of much yet.

The confluence of the 100 (red line) and 200-day (blue line) moving averages at 152.68-70 is still holding and that will keep sellers interested to maintain some downside pressure after the break lower last week.

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