USD/JPY drops below 110.50 as US T-bond yields pare early gains
|- USD/JPY lost its traction during the American trading hours.
- US Dollar Index stays in the positive territory above 92.00.
- 10-year US Treasury bond yield erased majority of daily gains.
Following Monday's decline, the USD/JPY pair staged a technical correction and rose above 100.70 during the European trading hours. Nevertheless, the pair lost its traction in the second half of the day and was last seen losing 0.14% on the day at 110.46.
Earlier in the day, rising US Treasury bond yields helped USD/JPY push higher. After rising nearly 2%, however, the benchmark 10-year US T-bond yield reversed its direction and erased a large portion of its daily gains, causing USD/JPY to turn south. Currently, the 10-year US T-bond yield is up only 0.45% on a daily basis.
Meanwhile, the data from the US showed on Tuesday that the Conference Board's Consumer Confidence Index improved to 127.3 in June from 120 in May. This reading came in better than Reuters' estimate of 119 but received little to no market reaction.
The US Dollar Index is currently rising 0.26% on the day at 92.12, limiting USD/JPY's downside for the time being.
On Wednesday, May Industrial Production data for May will be featured in the Japanese economic docket.
USD/JPY near-term outlook
Credit Suisse analysts think that USD/JPY has the potential to go higher. "USD/JPY remains well supported above key support from the 13-day exponential average and uptrend from January at 110.45/03 and we continue to look for a sustained break higher," analysts said. "This should then expose long-term and more important resistance, starting at 111.93 and stretching up to the 112.40 high of 2019."
USD/JPY to grind higher and berak resistance at 111.93, then 112.18/40 – Credit Suisse.
Additional levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.