USD/JPY Forecast: Risks drop toward 110.00 if 10-yr treasury yield falls below 2.59 percent


USD/JPY could drop to 110.00 in the near-term if the 10-year treasury yield falls below the previous day's low of 2.594 percent. 

The benchmark yield fell seven basis points from 2.67 percent yesterday, forming a bearish outside-day candle. The drop in yields was likely a result of below-forecast US consumer price inflation validating Fed's patience on further rate hikes. 

A close today below 2.594 percent would reinforce bearish continuation signaled by yesterday's outside-reversal candle and open the doors for a deeper drop toward the recent low of 2.54 percent. 

Put simply, the dollar could take a beating if the 10-year yield slides below 2.294 percent. That could happen if the US February durable goods orders data, scheduled for release at 12:30 GMT, prints below estimates. 

Technically speaking, 111.11 and 111.46 are the levels to watch out for in the USD/JPY pair. 

A break below 111.11 would revive the bearish view put forward by the rising wedge breakdown on the hourly chart, as discussed earlier today. The pair could then challenge the previous week's low of 110.75. 

On the higher side, 111.46 - the high of the rising wedge - needs to be breached to strengthen the bull grip. 

US 10-year treasury yield

USD/JPY hourly chart

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.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex Analysis

Editors’ Picks

GBP/USD attempts recovery amid as Johnson's condition is in focus

GBP/USD is trading above 1.23 as the focus remains on PM Johnson's condition. The 55-year old is in intensive care, receiving oxygen and Foreign Secretary Raab is in charge.

GBP/USD News

EUR/USD rises toward 1.09 amid a better market mood

EUR/USD is trading closer to 1.09, up amid falling coronavirus cases in the old continent and as German industrial output beat expectations with 0.3% for February. New US fiscal stimulus is also eyed.

EUR/USD News

Forex Today: Dollar falls, gold up amid upbeat COVID-19 data, Boris' ICU stay causing concerns

The market mood remains upbeat, with the dollar down and Gold resuming its rally. The precious metal is getting comfortable above $1,650., Spain, France, and Germany continued reporting encouraging coronavirus figures in both the number of infections and deaths. 

Read more

Gold off highs, still positive above $1,650 amid mild risk-on

Gold benefits from a sustained risk recovery. Gold steps back from an intraday high of $1,674.15 to $1,663 during Tuesday’s Asian session. Even so, the yellow metal registers 0.20% gains while also staying near to the recently flashed four-week high.

Gold News

WTI probes $30.00 following latest recovery moves, eyes on API

WTI benefits from recent risk-on, upbeat comments from US President Trump. Oil traders may now wait for the private weekly inventory data from the American Petroleum Institute (API), prior 10.485M, for fresh direction.

Oil News

Forex Majors

Cryptocurrencies

Signatures