USDJPY – the Dollar had a decent bounce from overnight and near 4-month lows at 107.365 to 107.92 at the New York close. USD/JPY rallied further in early Asia as Wall Street stocks roared back. Overnight US bond yields were steady with the benchmark 10-year bond yield up one basis point to 1.16%. Japan’s 10-year JGB rate was steady at -0.13% from -0.16% yesterday. With the yield gap narrowing and the COVID-19 threat still very much at the forefront of markets, USD/JPY topside is limited.

The latest COT report for the week ended 25 February saw total net speculative JPY short bets increase to -JPY 56,359 from -JPY 27,221 the previous week. That’s a massive build for one week, and another reason the topside of USDJPY is limited.
Immediate resistance on the day for USDJPY lies at 108.60 (overnight high traded 108.578). The next resistance level lies at 109.00. Immediate support can be found at 107.90 and 107.40. Look for initial consolidation between 107.70 and 108.70. Prefer to sell rallies.