USD/JPY drops toward 110.50 on plunging US Treasury bond yields
- USD/JPY came under renewed bearish pressure in early American session.
- 10-year US Treasury bond yield is down more than 5%.
- US Dollar Index continues to push higher toward 92.50.
After spending the first half of the day fluctuating in a relatively tight range below 111.00, the USD/JPY pair lost its traction in the early American session and was last seen losing 0.35% on the day at 110.55.
US T-bond yields fall sharply on Tuesday
The sharp decline witnessed in the US Treasury bond yields seems to be weighing on USD/JPY on Tuesday. Currently, the benchmark 10-year US Treasury bond yield is trading at its lowest level since late February at 1.35%, losing more than 5% on a daily basis.
On the other hand, the broad-based USD strength is helping USD/JPY limit its losses for the time being. At the moment, the US Dollar Index is up 0.18% at 92.40.
The data from the US showed on Tuesday that the ISM Services PMI declined to 60.1 in June from 64 in May. This reading fell short of the market expectation of 63.5. Further details of the publication revealed that the Prices Paid Index component edged lower to 79.5 from 80.6.
On Wednesday, the preliminary Coincident Index and Leading Economic Index for May from Japan will be looked upon for fresh impetus.
Technical levels to watch for