USD/JPY – Stimulus expectations push it above 103.00

Offered tone around Yen gathered pace once again in Asia, pushing the USD/JPY pair to a session high of 103.20 levels.

Trades at 12-day high

At 103.14, the spot is trading at its highest level since July 1. Yen fell sharply on Monday after Japanese PM Abe signaled fresh stimulus is coming soon. Market expects the stimulus to be ‘double barreled’, i.e. fiscal stimulus accompanied by monetary easing.

Meanwhile, overnight rally in the US S&P 500 index to record highs pushed up the treasury yields and added to the bid tone around the US dollar. The US data docket is light. Hence, the focus is on Fed speak – Tarullo and Bullard.

USD/JPY Technical Levels

Acceptance above the immediate hurdle at 103.55 (June 16 low) would open doors for 103.75 (61.8% of Brexit drop). Further gains could run into resistance at 104.00 levels. On the other hand, a breakdown of support at 102.80 (50% of Brexit drop) could yield 102.13 (10-DMA). Further losses could run into support at 101.72 (5-DMA).