USD / JPY rises above 110.00 as US Treasury yields extend the rebound

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  • USD / JPY is rising for the second day in a row on Wednesday.
  • The US Dollar Index records small daily gains above 93.00.
  • The yield on 10-year US Treasuries continues to climb after Tuesday’s rally.

The intense flight to safety at the beginning of the week caused the pair USD/JPY fell to its lowest level since late May at 109.07 on Monday. However, the positive change in market sentiment allowed the USD / JPY to experience a decisive rally. After rising nearly 50 pips and erasing most of Monday’s losses on Tuesday, the pair extended its rally and was last seen rising 0.26% on the day at 110.12.

USD / JPY capitalizes on rising US Treasury yields.

Driven by risk flows, major US stock indices gained more than 1% on Tuesday and the yield on 10-year US Treasuries, which fell to its weakest level since February on Monday, it increased 2.6%. Currently, the 10-year benchmark US Treasury yield is rising 1.23% to 1.238%, helping USD / JPY preserve its bullish momentum.

Meanwhile, the US Dollar Index is holding on to modest daily gains above 93.00 after closing the previous four trading days in positive territory.

There will be no high-level data releases from the US for the remainder of the day and risk perception is likely to remain the main driver of the USD / JPY movements.

Weekly data from initial jobless claims from the US Department of Labor on Thursday and preliminary July PMI reports from US IHS Markit on Friday will be seen to gain further momentum in the second half of week.

Technical levels

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