USD/JPY slides to 106.30 area as US T-bond yields turn south
|- 10-year US Treasury bond yield erases Monday's recovery gains.
- US Dollar Index preserves strength to limit pair's losses.
- Risk sentiment is likely to continue to drive pair's action.
The USD/JPY pair, which was able to post modest gains in the last three trading days, reversed its direction on Tuesday as the souring market sentiment helped the safe-haven JPY gather strength against its rivals. As of writing, the pair was down 0.25% on the day at 106.35.
Eyes on headlines surrounding US-China trade dispute
Responding to the Trump administration's decision to delay the ban on Chinese telecom giant Huawei for 90 days while adding up to 46 Huawei subsidiaries to its entity list, China's Foreign Ministry said that they were dissatisfied with the US action, killing hopes of this decision by the US helping the sides come to terms in next months face-to-face negotiations in Washington.
The initial market reaction to this development caused the US Treasury bonds to find demand and weighed on their yields, forcing the 10-year reference to erase Monday's recovery gains.
Meanwhile, despite the fall in the T-bond yields, the Greenback preserves its strength as it continues to outperform its major European counterparts and allows the pair to limit its fall for the time being. At the moment, the US Dollar Index is up 0.04% on the day at 98.40. There won't be any macroeconomic data releases from the US in the remainder of the day and the risk perception is likely to continue to impact the pair's action.
Technical levels to watch for
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