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


Today last price 108.31
Today Daily Change -0.09
Today Daily Change % -0.08
Today daily open 108.4
Daily SMA20 107.68
Daily SMA50 107
Daily SMA100 107.58
Daily SMA200 109.07
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



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.

Feed news

FXStreet Trading Signals now available!

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

Latest Forex News

Editors’ Picks

EUR/USD pressured around 1.13 after jump in US jobs

EUR/USD is trading around 1.13, down after US Non-Farm Payrolls shocked with a leap of 2.5 million jobs in May, contrary to all projections. The greenback is gaining while stocks are falling, a correlation breakdown. ECB stimulus previously supported the euro.


GBP/USD retreats from highs

GBP/USD is trading below 1.27, off the highs. The pound is struggling after Chief EU Negotiator Barnier reported little progress in Brexit talks. Robust US jobs support the dollar.


Gold sees weekly closing below $1700 - a caution for bulls

The steady decline in Gold prices (futures on Comex) accelerated on Friday, as the rates closed the week below the 1700 mark for the first time in three weeks at 1688.35. A weekly closing below the key 1700 level is unlikely to bode well for the bulls.

Gold News

Institutional demand exceeds Bitcoins supply

Greyscale floods the market with fresh money to satisfy the demand of its clients. Investors, willing to pay a 29% surcharge for exposure to Bitcoin without suffering the legal and operational inconveniences. Market remains at risk on the verge of new bullish territory.

Read more

WTI rallies above $39 as focus shifts to OPEC+ meeting

Crude oil prices built on Thursday's modest gains and rose sharply on Friday boosted by the upbeat market mood optimism surrounding Saturday's OPEC+ meeting. 

Oil News