USD/JPY: Bouncing off multi-week lows near 108.70 amid higher US Treasury yield

• USD/JPY continues to decline for the third consecutive session.
• US Dollar Index succumbs to pressure, slips below 91.70 over  several weeks.
• Higher US Treasury yields undermine the US dollar.

The USD/JPY pair started the day on a negative tone and touched the multi-week low near 108.75  before rebounding 30 pips to the high of 109.05 in the European trading session.  

At the time of writing, USD/JPY is trading at 109.00, down 0.03% on the day.

The broad-based selling in the US Dollar Index (DXY) pushes the major on  a  negative trajectory for the third straight session. The US Consumer Price Index (CPI) on Tuesday came in at 0.6% in March, up 2.6% on a YoY basis,   which triggered a sell-off in the greenback.  

On the other hand, Bank of Japan Governor Haruhiko Kuroda offered the usual cautious tone over  growth and reaffirmed the continuation of powerful monetary easing to achieve the central bank’s 2% inflation target. The economy is picking up gradually, although risk factors were skewed to the downside. Investors assess this as a signal to delay a rate hike by the central bank, thus  affecting the Japanese yen negatively.

A sudden pickup in the US Treasury yields from 1.61% to 1.63% lends some support to the greenback. This, in turn, helped  the pair to regain the 109.00 mark during the session.

As for now, the dynamics around the US dollar ahead of US Fed Chair Jerome Powell’s speech will continue to influence the pair’s performance.