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  • USD/JPY is reporting moderate gains above 110.00 at press time, having hit 1.5-month lows yesterday.  
  • The pair seems to have picked up a bid, tracking the slight recovery in the US 10-year treasury yield from lows seen yesterday.
  • BOJ’s Summary of Opinions released earlier today offered little hawkish or dovish surprises, leaving JPY pairs largely unaffected.  

USD/JPY is currently trading at 110.11, having hit a low of 109.70 in the Asian session yesterday – the lowest level since Feb. 8.  

The pair dived out of the trendline rising from January lows on Friday as the recession fears gripped markets with the spread between the US 10-year and three-month treasury yields turning negative for the first time since 2007. The resulting risk-off tone in equities kept JPY better bid in the Asian session yesterday.  

The dollar sell-off, however, stalled below 110.00 in the US trading hours despite the drop in the 10-year treasury yield below 2.4 percent, the lowest level since December 2017 and the pair has now moved back above the psychological level, possibly tracking the 10-year yield’s recovery from 2.38 percent to current 2.42 percent. Possibly adding to the bid tone around the USD are the marginal gains in the S&P 500 futures.  

Looking forward, the currency pair may revisit the former support-turned-resistance of 110.30 if the recession fears ebb, allowing a recovery rally in stocks.  

The Bank of Japan’s Summary of Opinions for the meeting, dated March 15, released a few minutes before press time reiterated the need to maintain powerful easing while keeping an eye on side-effects of stimulus. The Summary offered little hawkish or dovish surprises, leaving the JPY pairs largely unaffected.  

Technical Levels