FxWirePro: USD/JPY tests 108 handle, UST yields surge pushing the dollar higher as Powell dismissed bond rout

USD/JPY chart - Trading View 

USD/JPY spiked higher overnight to refresh multi-month highs after Powell in his speech downplayed bond market worries.

Powell said that they would be worried about “disorderly market conditions,” but repeated that they won’t hike rates until inflation runs above 2% for some time.

Wall Street plummeted, the 10-year US Treasury bond yield rose sharply and provided a boost to the greenback as a result.

At the time of writing, the US Dollar Index is trading at its highest level since Dec 2020 at 91.73, extending previous session's 0.75% gains.

Bank of Japan Governor Haruhiko Kuroda said that the Bank of Japan won't hesitate to add easing if needed.

USD/JPY briefly touched 108 in early trade on the back of rising US yields and spillover from the volatility on Wall Street.

Also, the US Senate Democrats on Thursday took a major procedural step toward approving the $1.9 trillion coronavirus relief package, a further boost to the dollar.

USD/JPY trades with a major bullish bias. The pair is now testing crucial resistance at 55-month EMA at 107.90. Decisive break above will open upside.