• US Dollar rises sharply across the board on higher yields, and upbeat US data.
• Japanese yen manages to hold steady versus other currencies amid risk aversion.
• USD/JPY holds bullish tone, but unable to consolidate above 140.00.

The USD/JPY reached levels above 140.00 for the first time since August 1998. The pair peaked at 140.12 and then pulled back to 139.70, amid an increase in volatility. A stronger US dollar across the board boosted the pair.

Another upbeat economic report from the US triggered more losses in Treasuries and boosted the dollar. The US Dollar Index is at 109.78, a level not seen in 20 years.

The US 10-year yield rose to 3.28%, the highest since June. The last report was the ISM Manufacturing which remained at 52.8 in August against expectations of a decline to 52. The Employment Index of the report jumped from 49 to 54.4. On Friday, the US official employment report is due, with market consensus suggesting an increase of 300K in payrolls.

Despite the rally in USD/JPY to fresh multi-decade highs the Japanese yen strengthened versus other currencies amid risk aversion. In Wall Street, the Dow Jones is falling by 0.75% and the Nasdaq drops by 1.70%.

Technical levels