USD/JPY extends gains in tandem with Nikkei, nears 109

By FXStreet The bulls gathered pace over the last hour, now pushing USD/JPY back towards 109 handle as strong gains on the Japanese indices further fuel risk-on moods in the markets.

USD/JPY prints fresh 2-week tops

The dollar-yen pair accelerated towards 109 handle after the Japanese stocks extended the rebound, as the underlying risk tone improved further on the back of Chinese CPI backed optimism. At the moment, the USD/JPY pair hovers near 2-week highs around 108.80 levels, recording a 0.42% gain on the day, while the Nikkei jumps over +2% to trade around 16,550 levels.

Looking ahead, the broader market sentiment is likely to dominate the USD/JPY moves, in absence of significant US economic releases due later today. While the US JOLTS jobs opening s and Fed speak will be closely eyed fur further momentum.

USD/JPY Technical levels to watch

In terms of technicals, the immediate resistance is located at 109 (round number). A break above the last, the major could test 109.50 (post-BOJ highs). While to the downside, the immediate support is seen at 108.50/41 (psychological levels/ hourly 20-SMA) and below that at 107.76/64 (5-DMA/ 1h 50-SMA).
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Source:: FX Street