USD/JPY inter-market: Back in sync with yield-spreads, 103 on cards?

The dollar-yen pair extends its relentless vertical rise that began in the late-Asian trades this Monday, after the Japanese PM Shinzo Abe confirmed a fresh round of extra economic stimulus measures to be announced tomorrow.

The major witnessed almost 2 big figures rally so far this session, with the persistent risk-on market profile lending support to the ongoing bullish run. The CBOE the Volatility Index (VIX) hovers near more-than four-week troughs just ahead of 13 handle, suggesting that appetite for risk remains in full swing.

Moreover, the global risk-on sentiment further pushes the US 10-year treasury yields and JGB yields higher, with the yield differentials tilting in favour of the USD. Hence, the US dollar index, greenback’s gauge, rises 0.30% to trade around 96.60 levels.     

Looking ahead, markets will now eagerly await further developments around the Japanese stimulus, while Brexit-related news flow may offer some respite to the JPY bulls. However, in wake of global central banks and policy makers pushing for further easing, the USD/JPY pair is expected to keep the upbeat momentum intact ahead of the Chinese macro updates and US retail sales and PPI figures due later in the week ahead.