USD/JPY extends sideways grind around 109.00

• USD/JPY is struggling to make a decisive move on Wednesday.
• US Dollar Index remains on track to post its lowest daily close since March 18.
• 10-year US Treasury bond yield is up more than 1%.

After closing the first two trading days of the week in the negative territory, the USD/JPY pair turned quiet and continues to fluctuate in a relatively tight range on Wednesday. As of writing, the pair was down 0.08% on a daily basis at 108.96.

DXY falls for the third straight day

Despite the broad-based selling pressure surrounding the greenback, USD/JPY’s losses remain  limited on the day as the modest rebound witnessed in the US Treasury bond yields make it difficult for the JPY to find demand. Currently, the benchmark 10-year US T-bond yield is up 1.1% at 1.634%.  

On the other hand, the US Dollar Index, which touched its lowest level in nearly four weeks at 91.57 earlier in the day, is consolidating its losses at 91.66 and remains on track to post its worst daily close since March 18.

The only data from the US showed on Wednesday that the Import Prive Index jumped to 6.9% on a yearly basis in March from 3% in February but this reading failed to trigger a meaningful market reaction.

Meanwhile, FOMC Chairman Jerome Powell reiterated that it was “highly unlikely” for the Fed to start raising rates before the end of 2020 but added that the decision on rates was “outcome-based.”

In the early trading hours of the Asian session on Thursday,  Bank of Japan (BoJ) Governor Haruhiko Kuroda will be delivering a speech. Later in the day, weekly Initial Jobless Claims, Retail Sales and Industrial Production data will be featured in the US economic docket.

Technical levels to watch for