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  • USD/JPY lost its traction in the second half of the day.
  • 10-year US Treasury bond yield is down more than 2% on Thursday.
  • US Dollar Index remains on track to close below 90.00.

The USD/JPY pair broke below 109.00 in the early American session and dropped to a daily low of 108.75 before going into a consolidation phase. As of writing, the pair was down 0.35% on a daily basis at 108.83.

DXY retreats below 90.00  

The sharp decline witnessed in the US Treasury bond yields is weighing on USD/JPY on Thursday. Following Wednesday’s upsurge on the back of the FOMC’s hawkish tone, the benchmark 10-year US Treasury bond yield is currently losing 2.5% at 1.634%.

Meanwhile, falling yields make it difficult for the greenback to find demand as well. The US Dollar Index (DXY) is down 0.4% on the day at 89.37, not allowing USD/JPY to stage a rebound. The risk-positive market environment is putting additional weight on the USD’s shoulders as well. Reflecting the upbeat market mood, Wall Street’s three main indexes are rising between 0.7% and 2%.

Earlier in the day, the data from the US revealed that the weekly Initial Jobless Claims fell to 444,000 last week from 478,000. This reading came in slightly better than the market expectation of 450,000 but was largely ignored by investors.

On Friday, the National CPI data will be featured in the Japanese economic docket. Nevertheless, it would be surprising to see if market participants were to pay any attention to inflation figures.  

Technical levels to watch for


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