USD/JPY spikes to 110.00 as US Treasury yields recovers

• USD/JPY rebounds sharply from the early dip in the European trading hours.
• 10-year US Treasury yields rebound from sub 1.30 level and gain more than 3%.
• US Dollar Index continues to push higher toward 92.50.

After edging lower in the earlier trade session fluctuating in a narrow trade range below 110.00, the USD/JPY pair gained its traction in the early European trading hours.

At the time of writing, USD/JPY is trading at 110.02, up 0.20% for the day.

The sharp rise in the US Treasury bond yields underpins the demand for the US dollar responsible for USD/JPY advances on Friday. Currently, the benchmark 10-year US Treasury yield is trading at 1.33% gaining more than 3% on a daily basis.

Investors rushed to the US dollar as market volatility heightened amid risk off mood.

On the other hand, the Japanese yen held the ground on its safe haven appeal as investor’s risk appetite dampens on rising coronavirus infections.

The earlier gain in the yen trimmed after a report revealed that the Bank of Japan is expected to slash this fiscal’s year’s economic growth in fresh quarterly projections due out next week.

As for now, the dynamics around the US dollar continue to influence the pair’s performance.

USD/JPY additional levels