USD / JPY declines to fresh multi-month lows below 109.00

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  • USD / JPY continues to push lower early in the US session.
  • The US Dollar Index returns above 92.00 after US data.
  • The 10-year US Treasury yield loses more than 1%.

The pair USD/JPY it came under renewed downward pressure during US business hours and fell to its lowest level since late May at 108.88. At time of writing, the pair was down 0.26% on the day at 108.98.

Falling US Treasury Yields Drag USD / JPY Lower

Risk aversion is weighing on US Treasury yields in the second half of the day and keeping USD / JPY on the defensive. Currently, the yield on the benchmark 10-year US Treasury is down 1.1% on the day to 1,164%.

On the other hand, the US dollar index trimmed previous losses and remained lateralized on the day in the last hour, limiting the decline in USD / JPY for the time being.

US data revealed on Tuesday that factory orders rose 1.5% in June, beating the market’s expectation of a 1% increase. On a negative note, the IBD / TIPP economic optimism index fell to 53.6 in August from 54.3 in July.

Meanwhile, the S&P 500 and Nasdaq Composite indices, which opened modestly higher, are losing 0.1% and 0.5%, respectively, confirming the observed negative shift in market sentiment.

No other US data will be released for the remainder of the day and risk perception is likely to continue to affect USD / JPY movements.

Technical levels

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