USD/JPY extend gains above 112.30, to fresh 1-month highs

USD/JPY broke above Asian session highs and extended the rally above 112.00. The pair reached at 112.44, the highest level since May 17. It is trading near the highs, holding a strong bullish tone. 

The rally in the USD/JPY pair is taking place despite the decline in the US Dollar Index, that fell to 96.24, the lowest in a week and is now headed toward the lowest close since early October. 

The yen is the worst performer, among the most traded currencies on Tuesday. USD/JPY is being supported by US yields. The 10-year rose to 2.20%, the highest in almost two weeks and is having the biggest daily gain in weeks. 

Above key levels 

The pair is making a clear break of the 112.00 handle that capped the upside late in May and several times in June. Also, it is above the 100-day moving average for the first time since mid-May. 

The rally could reinforce the short-term bullish outlook for the US dollar, particularly if it is able to hold on top of 112.00. To the upside, the next relevance resistance could be seen at 112.50/55 and 113.05 (May 3 high).