FxWirePro: USD/JPY spikes higher to test new 7-year high, yen under fresh selling pressure after BOJ’s JGB action

Chart - Courtesy Trading View 

USD/JPY was trading 0.89% higher on the day at 123.16 at around 06:00 GMT.

The pair has resumed upside after brief pause on Friday's trade, has refreshed 7-year high.

The yen came under selling pressure after Bank of Japan (BOJ) makes second offer to buy unlimited Japanese Government Bonds (JGBs).

The Japanese central bank made a second offer to buy unlimited amount of 10-year JGBs at 0.25%. 

The offer follows the first round of offers by the BOJ which failed to find any bids, propelling the 10-year Japanese yield to 0.25%.

Rising covid concerns in Germany and China along with rising tensions between the West and Russia amid indecision over the Moscow-Kyiw talks add to dollar demand.

US jobs report later this week will be crucial considering the hawkish Fedspeak and recently softer data, amid the geopolitical crisis.

Technical bias is also strongly bullish. Scope for test of 125.85 (2015 high). 5-DMA is immediate support at 121.89. Minor weakness on break below.