USD/JPY up 0.32% on the day on central bank divergences

Currently, USD/JPY is trading at 114.66, up 0.32% on the day, having posted a daily high at 114.85 and low at 114.30.

Fed's Beige Book: Majority of Fed districts described labor markets as tight

USD/JPY up 0.32% on the day with the help of a rise in US yields allowing for the USD to regather some lost ground this year that has been set-off by investor jitters and President-elect Trump’s comments that the “USD is too strong” over the weekend. "US fixed income yields tracked higher the 10yr yield adding +7bp to 2.395%, though US data was mixed and the mood on the “Trump reflation trade” remains cautious," explained analysts at Westpac.

Fed's Yellen expects rates to be close to longer-run neutral rate of 3 pct by end of 2019

Overnight, Yellen spoke and she will do so again tomorrow before Trump's inauguration on Friday as the next major risk event. Yellen was somewhat hawkish, but did not give off anything that markets did not previously hear last time around and much all depends on the economic performance in the US. We are back to Central bank divergence when it comes to the Yen and US dollar and that is supporting the recovery in the cross for the meantime. 

USD/JPY levels
 
With spot trading at 114.67, we can see next resistance ahead at 114.85 (Daily High), 114.88 (Daily Classic R2), 114.91 (Hourly 200 SMA), 115.30 (Weekly Classic PP) and 115.43 (Weekly High). Support below can be found at 114.39 (Yesterday's High), 114.30 (Daily Open), 114.30 (Daily Low), 114.14 (YTD Low) and 113.94 (Hourly 100 SMA).