USD/JPY Price Analysis: Eyes 100-day SMA hurdle as US yields extend Thursday’s rise

• The uptick in 10-year US yield propels USD/JPY higher. 
• The pair looks set to challenge 100-day MA hurdle at 107.00.

USD/JPY is trading near 106.84 at press time, representing a 0.28% gain on the day, having carved out a bullish engulfing candle on Thursday. 

The US 10-year yield is currently trading at 2-½-month highs near 0.78% and extending Thursday’s 10 basis point rise from 0.65% to 0.75%. As such, the pair appears on track to test the 100-day simple moving average (SMA) hurdle, currently at 107.00. 

Supporting the bullish case is the risk-on action in the global equity markets. The Dow JOnes Industrial Average jumped over 0.5% on Thursday after the Federal Reserve’s President signaled tolerance for high inflation. The futures tied to the S&P 500 are currently up 0.7%, while major Asian indices are flashing green. Hence, the anti-risk Japanese yen is likely to remain under pressure. 

Acceptance above the 100-day SMA may invite stronger buying pressure and pave thw way for the 200-day SMA, currently at 107.97. On the downside, Thursday’s low of 105.60 is the level to beat for the bears. 

Daily chart

Trend: Bullish

Technical levels