USD/JPY has been trading in uptrend after following a series of domestic data events and action on Wall Street. There was a good rally in the greenback and again in Asia due to the pace of the sell trend in US treasuries that has increased sharply even though there was a dovish comment from the Fed.

Further, The Bonds yields are going up because there is a massive supply of bonds and expectations of rising inflation. ”The rise in treasury yields was led by a poor result in the 7-year Treasury note auction and expectations that the Fed may push forward rate hikes,” said an analyst.

Further adding a boost to the greenback is the news, House Speaker Nancy Pelosi has stated, “House Democrats believe that the minimum wage hike is necessary.  Therefore, this provision will remain in the American Rescue Plan on the Floor tomorrow.  Democrats in the House are determined to pursue every possible path in the Fight for 15.”

Confirmation that the $15 federal minimum wage will be included in the latest version of the $1.9 trillion bill follows the Senate voting on a nonbinding agreement to ban raising the minimum wage during the pandemic.

On the other hand, Japan’s industrial output has rose for the first time in 3 months in January thanks to a pickup in global demand, as a welcome sign for an economy still looking to shake off the drag of the coronavirus pandemic.

But retail sales, a key gauge of consumer spending, posted their second straight month of declines in January as emergency measures taken in response to the pandemic hit consumption. Official data released on Friday showed factory output advanced 4.2% in January, boosted by sharp rises in production of electronic parts and general-purpose machinery, as well as a smaller increase in car output.

USD/JPY 4 Hour Chart:

Support: 105.86 (S1), 105.56 (S2), 105.29 (S3).

Resistance: 106.43 (R1), 106.70 (R2), 107.00 (R3).

Greenback is in uptrend as compared to the Japanese yen, we expect a bullish trend for USD/JPY.