18 Feb 2015
USD/JPY drops along with Treasury yields
FXStreet (Mumbai) - The USD/JPY pair hit a low of 118.55, tracking the fall in the US Treasury yields after the Fed minutes showed little rush among policymakers to raise interest rates.
USD/JPY: falls below 50% Fib level
The pair fell below the 50% retracement level of up move from 117.16 to 120.46 located at 118.81. The Japanese Yen gained strength as the 10-year yield in the US fell to 2.049% from the pre-minutes level of 2.12%. The yield is now down 9.4 basis points for the day. Similar losses are seen on the short duration treasury yields as well.
Moreover, the Fed minutes revealed that policymakers need more evidence regarding growth and inflation before resuming policy normalization. The dovish tone may have pushed rate hike bets far out on Q4 2015, leading to a fall in the yields and the USD/JPY pair. The pair could fall to 61.8% retracement level at 118.42 if the yields continue to slump.
USD/JPY Technical Levels
The immediate support is seen at 118.42, under which the pair could drop to 117.94 levels. On the flip side, resistance is seen at 118.81 and 119.20 levels.
USD/JPY: falls below 50% Fib level
The pair fell below the 50% retracement level of up move from 117.16 to 120.46 located at 118.81. The Japanese Yen gained strength as the 10-year yield in the US fell to 2.049% from the pre-minutes level of 2.12%. The yield is now down 9.4 basis points for the day. Similar losses are seen on the short duration treasury yields as well.
Moreover, the Fed minutes revealed that policymakers need more evidence regarding growth and inflation before resuming policy normalization. The dovish tone may have pushed rate hike bets far out on Q4 2015, leading to a fall in the yields and the USD/JPY pair. The pair could fall to 61.8% retracement level at 118.42 if the yields continue to slump.
USD/JPY Technical Levels
The immediate support is seen at 118.42, under which the pair could drop to 117.94 levels. On the flip side, resistance is seen at 118.81 and 119.20 levels.