- Yen gains on safe-haven flow amid concerns on Trump’s threat to impose new tariffs.
- US dollar drops against majors as US yields tumble.
The USD/JPY stabilized around the 108.50 area after falling almost a hundred pips during the last two trading days. The bais still point to the downside despite oversold readings in technical indicators.
Dollar drops as US yields react
The pair lost the 109.00 area earlier today and continued to slide during the American session. It bottomed at 108.48, the lowest intraday level since November 21. Near the end of the day, it stands around 108.55, 120 pips below Monday’s top.
The greenback remains under pressure against majors. US President Trump’s announcement of tariffs on Monday was followed by more threats on Tuesday, increasing market concerns. A deal between the US and China looks less likely now.
US yields tumbled on Tuesday, finally reacting to the risk-off mood across financial markets, falling sharply. The 10-year yield dropped to 1.70%, the lowest in almost a month. In Wall Street, equity prices are falling for the second day in a row. The Dow Jones drops 1.30% and the Nasdaq 0.99%.