USD/JPY climbs to fresh weekly highs above 103.50

• USD/JPY is rising for the second straight day on Thursday.
• US Dollar Index stages a rebound toward 90.00.
• Focus shifts to US Jobless Claims and ISM Services PMI data.

The USD/JPY pair snapped a three-day losing streak and closed in the positive territory on Wednesday. With the greenback gathering strength ahead of key macroeconomic data releases on Thursday, the pair stretched its upside and was last seen trading at its highest level since December 30 at 103.58, up 0.53% on the day.

DXY extends rebound into second day

With the results of the runoff election in Georgia pointing out to a Democratic majority in the US Senate, US Treasury bond yields surged higher on Wednesday and provided a boost to USD/JPY. The benchmark 10-year reference rose 8.4% and broke above the critical 1% level for the first time in nearly 10 months.

Although risk flows remained in control of the financial markets despite the protests in Washington, the USD capitalized on surging bond yields and the US Dollar Index (DXY) closed in the positive territory before pushing higher on Thursday. At the moment, the DXY is up 0.37% at 89.86.

Later in the session, the US Department of Labor's weekly Initial Jobless Claims data and the ISM's Services PMI will be looked upon for fresh impetus. In the meantime, the S&P 500 Futures are up 0.45% on the day, suggesting that the market mood is likely to remain upbeat in the second half of the day.

On Friday, Unemployment Rate and Coincident Index data will be featured in the Japanese economic docket.

Technical levels to watch for