Note the gap
USD/JPY today broke above 110.00 and touched the highest since May at 110.21 but it’s since pulled back and now trades right at the figure. That leaves a doji on the chart and with tomorrow as a potential ‘sell-the-fact’ day on the US-China deal signing, there are risks.
In particular, USD/JPY has been able to break above the Q4 highs while US 10-year yields haven’t and they have fallen to 1.81% from 1.92% at the start of the year. Recently they’ve had a tight correlation and the recent divergence suggests USD/JPY may be rich and/or that the recent breakout could be a fakeout.