- The anti-risk JPY remains bid in Asia.
- US 10-year yield hits lowest since November 2016.
- Navarro warns that a trade deal will take time.
- USD/JPY’s daily chart shows failed breakout.
USD/JPY is extending the overnight losses with the US treasury yields trading at the lowest level since November 2016.
The currency pair is currently trading at the 200-hour moving average support at 107.69, having dropped by more than 50 pips on Tuesday.
The bid tone around the US Dollar weakened yesterday as White House Navarro reminded that even though talks are headed in a good direction, getting a trade deal will talk time.
Navarro’s comments likely reminded markets of how the previous trade talks had abruptly ended in May, resulting in an escalation of the Sino-US trade war.
The yield on the US 10-year treasury note fell five basis points, lifting the JPY higher.
As of writing, the yield is trading at 1.96%, a level seen during the 2016 US Presidential elections and the slide to 1.5-year lows is again boding well for the Japanese Yen.
Looking forward, the currency pair may find acceptance below the 200-HMA, if yields continue to lose ground and the futures on the S&P 500 report losses, strengthening the bid tone around the JPY.
Technically speaking, Tuesday’s drop invalidated the bullish view put forward by the falling channel breakout confirmed by Monday’s close at 108.
Pivot points
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