- The US dollar loses strength as US yields fall from multi-year highs.
- DXY hits new lows on US time, pulls back from new multi-year high.
The USD/JPY rose earlier on Monday at 131.34, reaching the highest level since 2002, and then lost steam. During the American session, it turned lower and recently accelerated the decline to 130.09, the lowest level since Friday morning.
The pair hovers around 130.35, slightly lower for the day. He moved off highs after suffering another failure to hold above 131.00 showing difficulties in extending the rally. A sign that could be suggesting some consolidation or a correction ahead. So far the decline has been capped at 130.10. The next support is located at 129.70 and then at 129.30. A daily closing bell above 131.00 should open the doors for more gains.
As USD/JPY peaked on Monday, US yields hit new multi-year highs. As the decline in stock markets continues, demand for Treasuries improved, causing yields to decline. The US 10-year bond fell from 3.20% to 3.07%. The move weighed on the dollar which lost momentum.
The Dow Jones is losing 1.39% and the Nasdaq 3.12%. In Europe, the CAC 40 lost 52.75% and the DAX 2.15%. The risk-off environment helped the dollar more than the yen during most trading hours, but as US yields pull back, the scenario is changing, favoring the yen.
Technical levels
Source: Fx Street
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