USD/JPY rebounds above 139.50 as USD gathers strength

• USD/JPY regained its traction and climbed above 139.50.
• US Dollar benefits from upbeat macroeconomic data releases from the US.
• BoJ's Ueda hinted at a possible tweak to YCC strategy.

USD/JPY reversed its direction and advanced beyond 139.50 in the American session following a decline to the 139.20 area in the European session. At the time of press, the pair was up 0.12% on the day at 139.63.

USD regathers strength after latest data

Earlier in the day, Bank of Japan (BoJ) Governor Kazuo Ueda said that they could tweak the Yield Curve Control (YCC) strategy if the balance between the benefit and the cost of the policy were to shift. "It is possible to keep 5-year bond yield stable and low even by targeting 10-year yield, as long as the shape of yield curve is an upward slope," Ueda added and helped the Japanese Yen stay resilient against its rivals.

In the second half of the day, the US Dollar (USD) capitalized on strong data releases and caused USD/JPY to turn north. Annualized first-quarter Gross Domestic Product (GDP) growth got revised higher to 1.3% from 1.1% and the weekly Initial Jobless Claims came in at 229,000, mush lower than the market expectation of 245,000.

Nevertheless, the positive opening in Wall Street seems to be limiting the USD's gains for the time being and capping USD/JPY's upside. The S&P 500 and the Nasdaq Composite indexes were last seen rising 0.4% and 1.9% on a daily basis, respectively.

Market participants will pay close attention to comments from Federal Reserve (Fed) officials in the American session. According to the CME Group FedWatch Tool, the probability of the Fed leaving its policy rate declined below 55% from nearly 70% on Wednesday.

Technical levels to watch for