- 10-year US T-bond yield consolidates losses.
- Wall Street opens the day deep in the red.
- US Dollar Index pushes higher above the 98 mark.
The USD/JPY pair failed to take advantage of the broad USD strength in the first half of the day on Wednesday as the dismal market mood allowed the JPY to stay strong against its major rivals. Reaffirming the flight-to-safety, the 10-year US Treasury Bond yield slumped to its lowest level since September 2017 earlier today. However, with the T-bond yield falloff losing stream in the second half of the day, the pair recovered to 109.45 and turned positive on the day but struggled to preserve its momentum. As of writing, the USD/JPY pair was virtually unchanged on the day at 109.35.
After starting the day in the negative territory, major equity indexes in the U.S. continued to push lower to show that the risk-off mood remains dominant in the markets. At the moment, both the Dow Jones Industrial Average and the Nasdaq Composite are losing more than 1% on a daily basis.
On the other hand, the US Dollar Index, which spent the larget part of the day moving sideways near the 98 mark, gained traction in the last hour and advanced to 98.20, keeping the pair’s downslide limited for the time being. The only data from the U.S. today showed that the Richmond Fed Manufacturing Index improved to 5 in May from 3 in April but was largely ignored. The selling pressure surrounding the major European currencies continue to help the greenback find demand and outperform its rivals.
There won’t be any macroeconomic data releases from Japan on Thursday and the risk perception is likely to remain as the primary driver of the pair’s price action. Later in the day, the U.S. Bureau of Economic Analysis will publish its second estimate of the first-quarter GDP growth.
Technical levels to watch for
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