USD/JPY extends gains and hits 1-week highs above 111.00

The US dollar gained momentum across the board during the Asian session and extended the rally that started after the US jobs report. USD/JPY climbed to 111.03, hitting the highest level since July 28. 

The report showed that payrolls rose by 209K in July against expectations of 185K, the unemployment rate fell to 4.3% from 4.4%, as expected and wages gained 0.3%, the strongest increase since February. “Strong payrolls growth, falling unemployment, and firmer wage growth are good news and with PPI and CPI set to bounce next week we could see growing support within the Fed for additional rate hikes,” said James Knightley, Chief International Economist at ING. 

Constructive US jobs, but, where do euro bulls make a stand? - BBH

Expectation about a third rate hike from the Federal Reserve, during 2017 boosted the US dollar in the market. The Dollar Index rose to 93.60, a 1-week high. US bonds are losing ground. The 10-year yield rebounded and rose to 2.29%  from 2.21% (1-month low). 

USD/JPY Levels to watch 

To the upside resistance levels might be located at 111.15, 111.30 (Jul 28 high) and 111.70 (Jul 27 high). On the flip side, support could be seen at 110.55/60 (Aug 1 high), 110.20 (Asian session high) and 109.80/85 (weekly low).