USD trades high against the Japanese Yen. The reason behind this move can be linked to recovery in the US treasury yields and reducing fear of omicron coronavirus variant.

Further mixed Japanese data underpinned the bullish move of the pair. Japan’s Preliminary Industrial Production for October fell below 1.8% market consensus but recovered from -5.4% prior to +1.1% MoM level. On the other hand, the Unemployment Rate eased to 2.7% from 2.8% forecast and prior whereas the Jobs/Applicants ratio dropped below 1.17 expectations and 1.16 previous readouts to 1.15 in October.

Further, US data favors the greenback; the US Pending Home Sales jumped 7.5% MoM in October versus 1.0% forecast and -2.45 prior reading.

Adding to it, Japan’s ban on the international flights from South Africa and surrounding countries further favored the USD/JPY bullish move.

Whereas, Fed Chair Jerome Powell and Treasury Secretary Janet Yellen showed readiness to discuss the economic recovery from the COVID-19 pandemic. They will also appear before the House of Representatives Financial Services Committee on Wednesday.

Both released their prepared testimony late Monday, with Powell projecting 5% growth this year but noting the new variant poses downside risks to economic activity and jobs and raises uncertainty around inflation.

USD/JPY 4 Hour Chart:

Support: 113.02 (S1), 112.52 (S2), 112.05 (S3).

Resistance: 113.98 (R1), 114.45 (R2), 114.95 (R3).

Amidst all the catalysts favoring the greenback against the Japanese yen, we expect a bullish trend for USD/JPY.