FxWirePro: USD/JPY rebounds above 157 as dollar firms

•   USD/JPY bounced back above 158 on Thursday, shrugging off Wednesday’s decline to 156.38 as the pair benefited from a firm dollar and elevated US-Japan yield differentials.

• The yield differential between Japanese government bonds and US Treasuries also remains near recent extremes, maintaining a supportive backdrop for USD/JPY.

• The yield on benchmark US 10-year Treasury notes   hit 5.306%, the highest level since mid-June 2007, while the 30-year Treasury   yield was at 5.634%.

• Several Bank of Japan policymakers believed the central bank should accelerate the pace of interest-rate increases or move rates closer to its policy “goal” in the near term, according to a summary of opinions from its September meeting..

• Most policymakers cited the need to follow September’s rate hike with further increases in borrowing costs as inflationary pressures continue to build.

• Immediate resistance is located at 158.81 (50%fib), any close above will push the pair towards 159.42(Higher BB).

•  Support is seen at 152.27(Daily low) and break below could take the pair towards 156.53(61.8%fib)

Recommendation: Good to buy   around 158.00, with stop loss of 157.50 and target price of 158.50