USD/JPY edges lower toward 108 pressured by falling US T-bond yields


  • 10-year United States (US) Treasury bond yield is down more than 2% on Tuesday.
  • US Dollar Index extends consolidation near the 98.50 handle. 
  • Bank of Japan's governor says rates will remain very low at least through Spring 2020.

The USD/JPY pair struggled to find direction on Monday and fluctuated in a tight consolidation channel below the 108.50 handle before closing the day virtually unchanged amid the subdued trading action due to the Columbus Day holiday in the United States (US).

Risk aversion returns to the market

With the US bond markets returning to action on Tuesday, the pair edged lower pressured by the sharp drop in the 10-year US T-bond yield, which was last seen losing 2.5%. The lack of clarity regarding the details of the "phase-one" trade agreement between the US and China seem to be forcing investors to readjust their positions following the decisive rally witnessed in the bond yields in the second half of the previous week. As of writing, the pair was down 0.1% on the day at 108.27.

Earlier in the day, Bank of Japan (BoJ) Governor Kuroda said that the bank intends to keep the policy rate at "very low levels" at least through Spring of 2020. "We won't hesitate to take additional easing steps if risks grow that momentum towards achieving price target will be lost," Kuroda added. 

Despite the dismal market mood, however, Wall Street's main indexes look to open the day in the positive territory as investors are getting ready for the third-quarter earnings figures. Earlier today, JPMorgan Chase reported a $2.68 earnings per share (EPS) to beat the market estimate of $2.45. Citigroup is also scheduled to announce its earnings later today.

Meanwhile, the US Dollar Index continues to move sideways near the 98.50 in the absence of significant macroeconomic drivers and allows the risk perception to continue to dominate the pair's movements.

Technical levels to watch for

USD/JPY

Overview
Today last price 108.31
Today Daily Change -0.09
Today Daily Change % -0.08
Today daily open 108.4
 
Trends
Daily SMA20 107.68
Daily SMA50 107
Daily SMA100 107.58
Daily SMA200 109.07
 
Levels
Previous Daily High 108.52
Previous Daily Low 108.03
Previous Weekly High 108.63
Previous Weekly Low 106.65
Previous Monthly High 108.48
Previous Monthly Low 105.74
Daily Fibonacci 38.2% 108.33
Daily Fibonacci 61.8% 108.22
Daily Pivot Point S1 108.11
Daily Pivot Point S2 107.83
Daily Pivot Point S3 107.62
Daily Pivot Point R1 108.6
Daily Pivot Point R2 108.81
Daily Pivot Point R3 109.09

 

 

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