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  • USD/JPY extended its daily slide in the early American session.
  • 10-year US Treasury bond yield dropped to weekly lows on Tuesday.
  • US Dollar Index stays in the red below 93.00.

After rising above 105.00 on Monday, the USD/JPY pair reversed its direction on Tuesday and fell to a fresh daily low of 104.50. As of writing, the pair was down 0.3% on the day at 104.52.

Cautious market mood helps JPY gather strength

The fading optimism for a coronavirus relief bill in the US seems to be weighing on the Treasury bond yields. At the moment, the benchmark 10-year T-bond yield is down 2.5% on the day at 0.781% and is losing nearly 10% since touching its highest level in more than four months at 0.872% since last Friday. Earlier in the session, White House press secretary told Fox Business Network that chances for a deal before the presidential election was slim.

The data from the US showed on Tuesday that the Conference Board’s Consumer Confidence Index weakened to 100.9 in October from 101.3 in September. On a positive note, Durable Goods Orders rose by 1.9% in September to beat the market expectation of 0.2% but failed to provide a boost to sentiment. The US Dollar Index, which closed in the positive territory on Monday, struggled to preserve its bullish momentum and was last seen losing 0.17% on the day at 92.92.

In the meantime, Wall Street’s main indexes are trading mixed on the day, suggesting that investors are refraining from making large bets.

There won’t be any macroeconomic data releases from Japan on Wednesday and the risk perception is likely to continue to impact USD/JPY’s movements.

Technical levels to watch for