USD/JPY intermarket: Yen steady despite risk aversion and falling bond yields

USD/JPY is moving toward the 102.00 handle and it gained ground during the American session despite falling government bond yields and the sharp decline of US equity prices.

The pair bottomed earlier at 101.39 and then bounced to the upside and currently it trading at 101.97/99, less than 30 pips below Friday’s closing price. Greenback was able to rise versus the Japanese currency despite the fact the US bond yields drifted lower. The 10-year dropped to 1.463% as it continues to approached record lows, in Japan the yields was negative 0.199%. The Brexit voted triggered a flight-to-quality effect increasing the demand for bonds.

Dow down 300 points, USD/JPY remains near 102.00

In Wall Street, the Dow Jones is falling 1.83% and the Nasdaq drops 2.75% with both indexes moving to test daily lows. USD/JPY remained steady during the last hours despite the decline in equities. What could be supporting the pair is the expectation that the Japanese government might be considering to announce an additional stimulus package.