Ella 
USD/JPY surged to 149.50 in early Asian trade on Thursday. USD/JPY was boosted by rising U.S. bond yields, upbeat U.S. economic data and maintaining risk aversion in the market. At the same time, the U.S. dollar index (DXY) rose to its highest level since November at 106.65. The 10-year U.S. Treasury yield closed at 4.60%, its highest level since 2007.
Data released by the U.S. Census Bureau on Wednesday showed that durable goods orders rebounded in August, with a monthly increase of 0.2%, compared with expectations for a 0.5% decline. In addition, orders for durable goods excluding transportation increased by 0.4% monthly, which was better than the expected increase of 0.1%. The monthly rate of core capital goods orders was 0.9%, which was higher than the expected value of -0.4%. After the data was released, the US dollar strengthened across the board and the Japanese yen (JPY) was dragged down.
Risk aversion dominated markets as investors weighed the potential growth risks from rising long-term interest rates and an impending U.S. government shutdown. However, market participants will be paying close attention to comments from Federal Reserve (FED) Chairman Jerome Powell this week. A less hawkish tone from Fed Chairman Powell could limit the dollar’s upside against major currency pairs.
On the yen front, Japanese Finance Minister Shunichi Suzuki spoke again. Suzuki once again stated that it is paying urgent attention to the foreign exchange market. Traders are turning cautiously bullish on USD/JPY as the 150.00 mark will be a key level for Japanese authorities to take action to address the yen’s devaluation.
Market participants will focus on U.S. initial jobless claims last week, the third revision of second-quarter gross domestic product and existing home sales data. Market attention will turn to the Fed’s focus on consumer inflation, the core personal consumption expenditures (PCE) price index, which is due to be released on Friday.
