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  • USD/JPY came under renewed bearish pressure during American session.
  • Falling US Treasury bond yields weigh on USD/JPY on Monday.
  • US Dollar Index looks to close below 93.00. 

The USD/JPY stayed quiet near 106.50 during the first half of the day but lost its traction during the American trading hours and dropped to its lowest level since August 11th at 105.94. As of writing, the pair was trading at 105.97, losing 0.61% on a daily basis.

Falling US T-bond yields weigh on USD/JPY

The sharp drop witnessed in the US Treasury bond yields seems to be causing the pair to push lower on Monday. Earlier in the day, the US Commerce Department announced that it added 38 Huawei affiliates to the US economic blacklist and revived concerns over a further escalation in the US-China geopolitical tensions. 

At the moment, the US Dollar Index is down 0.32% on the day at 92.80 and the 10-year US Treasury bond yield is losing around 5%. 

Earlier in the day, the data from Japan showed that Industrial Production in Japan expanded by 1.9% on a monthly basis in June following May’s increase of 2.7% but was largely ignored by the market participants. On the other hand, the NY Fed Empire State Manufacturing Index slumped to 3.7 in the US and missed analysts’ estimate of 15 by a wide margin.

There won’t be any macroeconomic data releases of interest during the Asian session on Tuesday and the market’s risk perception is likely to remain as the primary driver of the pair’s movements.

Technical levels to watch for