USD/JPY climbs to two-week highs above 107.50
- USD/JPY rises for third straight day on Monday.
- Broad-based USD strength keeps USD/JPY's bullish momentum intact.
- 10-year US Treasury bond yield posts modest daily gains.
After dropping below the 106 handle last week, the USD/JPY pair staged a rebound in the second half of the week to close virtually unchanged at 106.70. With the USD gathering strength on Monday, the pair continued to push higher and touched a fresh two-week top at 107.57. As of writing, USD/JPY was up 0.85% on the day at 107.54.
The upbeat performance of Asian equity indexes at the start of the week made it difficult for the JPY to find demand as a safe-haven. Although the market sentiment turned sour with European stocks falling sharply, the pair's bullish momentum remained intact.
USD starts the week on a positive note
The US Dollar Index, which tracks the greenback's performance against a basket of six major currencies, capitalized on risk-off flows and rose above the 100 mark. Moreover, the modest daily gains witnessed in the 10-year US Treasury bond yield supported the positively-correlated USD/JPY pair. At the moment, the 10-year T-bond yield is gaining 0.5% on a daily basis.
On the other hand, Wall Street's main indexes are trading mixed with Nasdaq Composite staying in the positive territory and Dow Jones Industrial Average and the S&P 500 falling 0.85% and 0.55%, respectively.
There won't be any macroeconomic data releases that could impact the pair's movements in the remainder of the day and the USD's market valuation is likely to remain as the primary driver. On Tuesday, the Japanese economic docket will feature the Leading Economic Index and the Coincident Index for March.
Technical levels to watch for