- Widespread rises in the Japanese yen given the drop in US yields and risk aversion.
- The Dow Jones fell 1.50% and the yield on 10-year US debt fell to 3.44%.
- The USD/JPY pair loses more than a hundred points after the beginning of the American session.
The Japanese yen gained momentum during the American session amid risk aversion, which caused the USD/JPY fell from the highest level in seven weeks, near 137.75, to 136.36, marking a new daily low.
US regional bank stocks are under pressure on Tuesday, weighing on market sentiment, despite the acquisition of First Republic Bank.
US data was somewhat weaker than expected ahead of Wednesday’s FOMC decision. Market participants are still expecting a 25 basis point rate hike, but bets on a rate cut later in the year have increased over the past few hours. The 10-year US Treasury yield falls more than 4% to 3.43%, while the 2-year yield falls from 4.14% to 3.94%, reaching the lowest levels since last Thursday.
Falling government yields are helping the Japanese yen. Wall Street indices are down more than 1.5%, and the VIX has soared 20%.
USD/JPY records its worst day in weeks
The USD/JPY pair is experiencing its biggest daily loss in a month. The reversal is occurring from the 200-day SMA, which is currently sitting at 137.00. The next level of support could be found around 136.00, followed by 135.20. If the pair recovers above 137.20, the current bearish pressure would be relieved.
Considering the current price action in the financial markets and upcoming key events such as the FOMC and ECB decisions, as well as the NFPs, volatility is expected to remain high.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
