USD/JPY turns flat on the day above 109 as Wall Street pares early losses

• US stocks retrace their drop at the opening.
• US Dollar Index stays in the positive territory above 96.
• 10-year T-bond yield rises for the fourth straight day.

After edging down to 108.70 area in the early NA session, the USD/JPY erased all of its daily losses and turned flat above the 109 handle boosted by improved market sentiment.

Major equity indexes in the U.S. opened lower today but didn't have a difficult time moving into the positive territory boosted by strong gains seen in materials and industrials sectors. Additionally, following three straight days of gains, the 10-year T-bond yield continued to push higher to reflect the higher risk appetite in the second half of the day, which weighed on traditional safe-havens such as the JPY.

Meanwhile, today's upbeat macroeconomic data releases from the U.S. allowed the greenback to continue to outperform its major rivals with the DXY extending higher to a daily top of 96.26. Furthermore, Head of Supervision at the Federal Reserve, Randy Quarles, argued that the U.S. economy was very strong to provide an additional lift to the DXY. 

• US: Initial weekly jobless claims decreased by 3,000 to 213,000.
• US: Philly Fed Manufacturing Index improves to 17 in Jan vs 10 expected.

Technical levels to consider