USD/JPY extends slide, closes in on 109.00 on falling US T-bond yields
- USD/JPY continues to push lower in the second half of the day.
- 10-year US Treasury bond yield is down more than 3%.
- US Dollar Index stays relatively quiet around 92.50.
The USD/JPY pair stays under bearish pressure in the second half of the day on Monday and was last seen trading at 109.12, losing 0.4% on a daily basis.
Markets turn risk-averse on Monday
On Friday, the sharp decline witnessed in the US Treasury bond yields weighed heavily on USD/JPY. Although the benchmark 10-year US T-bond yield moved sideways during the European trading hours, it turned south in the American session and caused USD/JPY to stretch lower. Currently, the 10-year US T-bond yield is down 3.5% at 1.237%.
Reflecting the risk-averse market environment, the S&P 500 and the Nasdaq Composite indexes are down 0.6% and 1.2%, respectively.
In the meantime, the US Dollar Index is moving sideways around 92.50. Earlier in the day, the data from the US revealed that the NY Fed Empire State Manufacturing Index dropped to 18.3 in August from 43 in July. This print fell short of the market consensus of 2.
There won't be any data releases featured in the Japanese economic docket. Later in the day, July Retail Sales and Industrial Production data from the US will be looked upon for fresh impetus. However, US T-bond yields' movements are likely to continue to impact USD/JPY's action before the FOMC releases July meeting minutes on Wednesday.
Technical levels to watch for