USD/JPY rebounds modest from monthly lows, steadies below 109.50

USD/JPY remains on track to post losses for second straight day.
Recovering US Treasury bond yields helped USD/JPY erase part of its daily losses.
Wall Street's main indexes trade in the positive territory.

Eren Sengezer FXStreet

Following Tuesday's decline, the USD/JPY pair stayed under bearish pressure in the first half of the day on Wednesday and dropped to a monthly low of 109.11 before staging a rebound. As of writing, the pair was down 0.25% on the day at 109.40.

10-year US T-bond yield gains traction

Earlier in the day, the broad-based USD weakness and falling US Treasury bond yields caused USD/JPY to continue to push lower. However, the benchmark 10-year US T-bond yield, which lost more than 1% earlier in the day, reversed its direction and was last seen rising 2.5% at 1.316%, helping USD/JPY erase a portion of its daily losses.

Meanwhile, the positive shift witnessed in market sentiment is making it difficult for the greenback to gather strength and capping USD/JPY's upside. Currently, the S&P 500 Index is up 0.7% on the day and the US Dollar Index is posting modest losses at 92.55.

The data from the US showed on Wednesday that the NY Fed's Empire State Manufacturing Index improved to 34.3 in September from 18.3 in August.

On the other hand, Bank of Japan (BoJ) Governor Haruhiko Kuroda said on Wednesday that they will further relax monetary policy such as by reducing interest rates if necessary. Nevertheless, this comment had little to no impact on the JPY's performance against its rivals.

There won't be any high-tier data releases from Japan on Thursday and August Retail Sales data from the US will be looked upon for fresh impetus later in the day.

Technical levels to watch for

USD/JPY

Overview
Today last price	109.39
Today Daily Change	-0.30
Today Daily Change %	-0.27
Today daily open	109.69

Trends
Daily SMA20	109.89
Daily SMA50	109.93
Daily SMA100	109.83
Daily SMA200	108.02

Levels
Previous Daily High	110.16
Previous Daily Low	109.53
Previous Weekly High	110.45
Previous Weekly Low	109.62
Previous Monthly High	110.8
Previous Monthly Low	108.72
Daily Fibonacci 38.2%	109.77
Daily Fibonacci 61.8%	109.92
Daily Pivot Point S1	109.43
Daily Pivot Point S2	109.16
Daily Pivot Point S3	108.79
Daily Pivot Point R1	110.06
Daily Pivot Point R2	110.43
Daily Pivot Point R3	110.69

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.

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