USD/JPY flirting with highs above 114.00

The upside momentum in USD/JPY has now gathered extra pace, currently looking to extend the rebound further north of the 114.00 barrier.

USD/JPY attention to US ADP, yields

Spot is advancing further on Wednesday backed by the solid performance of US yields, where the key 10-year benchmark is navigating fresh multi-week tops around 2.55%.

Sustaining the up move and according to agency Reuters, the probability of a 25 bp rate hike by the Federal Reserve at the March meeting has ticked higher to just above 87% based on Fed Funds futures prices.

In the meantime, the pair is posting gains for the second session in a row, regaining the upper end of the recent range and opening the door for a potential re-test of last week’s tops in the 114.70 region.

In the US data space, the US ADP report is expected to show the private sector added 190K jobs during February, once again confirming the solid health in the US labour market. In Japan, Q4 GDP figures showed the economy has expanded less than initially estimated, 1.2% YoY and 0.3% inter-quarter.

USD/JPY levels to consider

As of writing the pair is gaining 0.07% at 114.06 facing the initial hurdle at 114.41 (55-day sma) ahead of 114.97 (high Feb.15) and then 115.09 (50% Fibo of the 2017 drop). On the flip side, a breakdown of 113.53 (low Mar.6) would aim for 113.46 (20-day sma) and finally 113.23 (23.6% Fibo of the 2017 drop).