USD/JPY steadies below 106 as US T-bond yield slump stalls


  • 10-year US T-bond yield looks to close more than 5% lower.
  • Wall Street's main indexes all lose more than 2% on Wednesday.
  • US Dollar Index advances to 98 to limit pair's losses.

The USD/JPY pair retraced a large portion of Tuesday's impressive rally today and now looks to close the day below the 106 mark. As of writing, the pair was down 0.73% on the day at 105.94.

The positive impact of the Trump administration's decision to delay additional tariffs on some Chinese imports on the market sentiment faded away today amid revived concerns over a global economic slowdown. Both retail sales and industrial production data from China fell short of market expectations and Destatis reported a 0.1% contraction in Germany economy in the second quarter.

Risk-aversion dominates markets on Wednesday

The flight-to-safety forced the 10-year US Treasury bond yield to fall sharply and caused an inversion with the 2-year T-bond yield curve for the first time since 2007. Although the yield slump seems to have stalled in the last hours, the 10-year T-bond yield remains on track to close the day with a loss of more than 5%. Stock markets reacted negatively to this development, which is seen as a sign of an upcoming recession, and all three main indexes of Wall Street are down around 2.5% on the day.

The traditional safe-haven JPY capitalized on the risk-off flows and gathered strength against its rivals. In fact, the EUR/JPY pair is now down 1.05% on the day at 118.

On the other hand, the US Dollar Index gained traction despite the sharp fall witnessed in the T-bond yields as the Greenback posted strong gains versus the euro and other risk-sensitive currencies. At the moment, the US Dollar Index is at its highest level since August 5 at 98, limiting the pair's losses for the time being.

During the Asian trading hours on Thursday, industrial production from Japan will be looked upon for fresh impetus but the market's risk perception is likely to continue to drive the pair's action.

Technical levels to consider

USD/JPY

Overview
Today last price 105.91
Today Daily Change -0.83
Today Daily Change % -0.78
Today daily open 106.74
 
Trends
Daily SMA20 107.36
Daily SMA50 107.83
Daily SMA100 109.26
Daily SMA200 110.2
Levels
Previous Daily High 106.98
Previous Daily Low 105.07
Previous Weekly High 107.09
Previous Weekly Low 105.26
Previous Monthly High 109.01
Previous Monthly Low 107.21
Daily Fibonacci 38.2% 106.25
Daily Fibonacci 61.8% 105.8
Daily Pivot Point S1 105.54
Daily Pivot Point S2 104.35
Daily Pivot Point S3 103.63
Daily Pivot Point R1 107.46
Daily Pivot Point R2 108.17
Daily Pivot Point R3 109.37

 

 

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.

Feed news

Latest Forex News

Editors’ Picks

AUD/USD stays under pressure around 0.6830 while beginning the NFP day

AUD/USD declines to 0.6830 during the initial Friday morning in Asia. The quote stretches losses made on Thursday as the second-tier Aussie data becomes the latest disappointment.

AUD/USD News

USD/JPY resumes decline after faltering around 109.00

The USD/JPY is ending the day with modest losses, as despite encouraging words from US trade representatives, there’s nothing new on a trade deal with China.

USD/JPY News

US Non-Farm Payrolls November Preview: Labor market continues to defy concerns

Non-farm payrolls are predicted to rise 180,000 in Nov following Oct’s 128,000 increase. The unemployment rate is expected to be unchanged at 3.6%. Hourly earnings will gain 0.3% in Nov after October’s 0.2% increase and annual earnings will be stable at 3.0%.

Read more

Gold: Modestly changed to $1475 as markets turn cautious ahead of US NFP

Gold fails to extend the previous day’s recovery while trading near $1475/76 amid Friday’s Asian session. That said, the yellow metal registers failures to close beyond 50-day EMA for the third consecutive day.

Gold News

USD/JPY resumes decline after faltering around 109.00

The USD/JPY is ending the day with modest losses, as despite encouraging words from US trade representatives, there’s nothing new on a trade deal with China.

USD/JPY News

Forex MAJORS

Cryptocurrencies

Signatures