USD/JPY stays negative, rebounds to the 109.70 region
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USD/JPY stays negative, rebounds to the 109.70 region

  • The pair finds support in the 109.35/30 band so far.
  • Yields of the key US 10-year benchmark stay below 3.0%.
  • US Initial Claims missed estimates at 234K WoW.

The greenback remains on the defensive vs. its Japanese counterpart on Thursday, taking USD/JPY to the 109.60/70 band after bottoming out near 109.50 during early trade.

USD/JPY looks to US data, yields

The pair is prolonging the weekly leg lower after testing fresh multi-month tops beyond 111.00 the figure on Monday, always on the back of the renewed decline in US yields and the prevailing risk-off sentiment.

In fact, yields of the key US 10-year note have been falling since last week’s multi-year peaks beyond the 3.13% level and are now navigating new 7-day lows in the 2.98% neighbourhood.

In the US data space, weekly Initial Claims rose more than expected 234K, while Existing Home Sales and the speech by NY Fed W.Dudley (permanent voter, centrist) area coming up next.

USD/JPY levels to consider

As of writing the pair is losing 0.40% at 109.63 and a break below 109.33 (low May 24) would target 108.64 (low May 4) en route to 107.92 (55-day sma). On the other hand, the next hurdle lines up at 110.21 (200-day sma) seconded by 110.26 (10-day sma) and finally 111.39 (high May 21).

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