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USD / JPY cuts gains and falls back to the 110.70 zone

  • USD / JPY lost its traction after rising to 111.00 on Monday.
  • The yield on 10-year US Treasuries has fallen more than 3%.
  • The US Dollar Index struggles to break above 92.00.

The USD / JPY pair advanced to a daily high of 111.00 during European trading hours, but reversed its direction early in the US session. At time of writing, the pair was down 0.1% on the day to the 110.70 zone.

Falling US Treasury Yields Hurts USD / JPY

Earlier in the day, the renewed strength of the USD helped the USD / JPY to rise. The US dollar index, which lost 0.5% last week, rose to 92.00 but struggled to break above that level in the absence of fundamentals. Currently, the DXY is practically unchanged on the day and is trading on 91.82.

Additionally, the 10-year US Treasury yield is shedding more than 3% on Monday, putting additional weight on USD / JPY’s shoulders.

The only US data revealed that the Dallas Fed’s manufacturing business index fell to 31.1 in June from 34.9 in May. Although this reading did not meet the expectation of 36.8, it was largely ignored by market participants.

Meanwhile, the major Wall Street indices are trading mixed at the start of the week, providing no clue to risk perception. At the moment, the Dow Jones Industrial Average is down 0.44%, while the Nasdaq Composite is up 0.95% to trade at a new all-time high of 14.482.

On Tuesday, the unemployment rate and retail trade data for Japan will be released.

Technical levels to take into account


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