USD/JPY climbs above 110.00 on surging US T-bond yields

• USD/JPY touched a fresh two-week high on Thursday.
• US Dollar Index stays in the negative territory near 93.00.
• 10-year US T-bond yield is rising more than 7%.

The USD/JPY pair gained traction during the American trading hours and climbed to its strongest level in two weeks at 110.21. As of writing, the pair was up 0.35% on the day at 110.16.

Surging US T-bond yields lift USD/JPY

Although the upbeat market mood is making it difficult for the greenback to find demand on Thursday, the sharp upsurge witnessed in US Treasury bond yields is providing a boost to USD/JPY. Currently, the benchmark 10-year US T-bond yield is sitting at its highest level in more than two months at 1.4%, rising 7.2% on a daily basis. On the other hand, the US Dollar Index is down 0.43% at 93.03.

Reflecting the risk-positive market environment, the S&P 500 Index is up 1.4% at 4,456 and the Dow Jones Industrial Average is gaining 1.65%.

Earlier in the day, the data from the US revealed that the weekly Initial Jobless Claims increased to 351,000 from 335,000. Additionally, Markit Manufacturing PMI edged lower to 60.5 in September's flash estimate, missing the market expectation of 62.5.

In the early Asian session on Friday, the National Consumer Price Index and the Jibun Bank Manufacturing PMI data will be featured in the Japanese economic docket.

Technical levels to watch for