USD/JPY fades 111.00 handle in tandem with US yields

• The USD/JPY is in a strong uptrend but is currently in a correction. 
• The yen is tightly correlated to US yields which are having a pullback on Friday.

The USD/JPY currency pair is trading at around 110.68 down 0.07% on Friday. 

USD/JPY rose throughout Asia and the first part of New York then about an hour before the American session the pair established a high of the day at around 110.10 before sliding about 40 pips in the 110.70 region. 

The US Dollar Index (DXY), which measures the buck against a basket of currencies reached a new multi-week high this Friday at 93.83 although the 10-year US Treasury yield benchmark is down on the day at around 3.078%. However, the 10-year note yield is up more than 4% for the week in support of the US dollar. 

In fact, the USD/JPY is tightly correlated to the US Treasury yields which explains the retracement in the pair. 

USD/JPY 4-hour chart 

The main trend is bullish and the pair is in a correction. Support is seen at 110.50 swing high followed by 110.36 swing low while to the upside bulls should expect resistance at 111.10 swing high followed by the 111.50 figure. The pair is trading above its 50, 100 and 200-period simple moving average on the 4-hour chart suggesting a strong upward momentum.