USD/JPY clings to daily recovery gains above 109.50 as US stocks stage decisive correction
- Wall Street opens in the green and pushes higher on Tuesday.
- US Dollar Index rebounds to mid-97s.
- 10-year T-bond yield rebounds following Monday's drop to multi-month lows.
The USD/JPY pair slumped to its lowest level since early January at 109.02 on Monday but reversed its direction today supported by positive market sentiment. As of writing, the pair was up 0.3% on a daily basis at 109.60.
In a relatively optimistic statement on Tuesday, the Chinese government said that the U.S. and China had agreed to keep talking about the trade dispute. Additionally, President Trump tweeted out that the U.S. will make a deal with China when the time is right and added that it could happen "much faster than people think." Wall Street opened the day higher with the CBOE Volatility Index dropping more than 10% and the JPY struggled to find demand as a safe-haven.
At the moment, the Dow Jones Industrial Average is adding 0.77% on the day while the Nasdaq Composite and the S&P 500 are rising 0.9% and 0.82%, respectively.
Furthermore, the 10-year US Treasury Bond yield, which generally shows a positive correlation with the USD/JPY pair, is also posting recovery gains today to help the pair continue to float above the 109.50 mark.
The only data from the U.S. showed that the imports prices and export prices both rose by 0.2% on a monthly basis in April to fall short of analysts' estimates but was largely ignored by the participants.
Technical levels to consider
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
