USD/JPY drops below 109.00 as the 10-year treasury yield hit 5-month low

Offered tone around the US dollar gathered pace, pushing the USD/JPY pair to a session low of 108.81 as Trump’s dovish comments on the interest rates pushed the 10-year treasury yield to a 5-month low of 2.24%. 

Trump - Dollar ‘too strong’, likes low rates

In an interview with the Wall Street Journal, Trump said the US dollar is “too strong” and added he likes the low rates environment, although he is still undecided on reappointment of Janet Yellen as the Fed chief.

Trump’s comments set the Dollar bears on the loose. Meanwhile, Japanese Yen remains well bid as well, courtesy of the heightened geopolitical tensions. 

China trade data due for release in the Asian session could influence broader market sentiment and therefore affect the demand for the Japanese Yen.  

USD/JPY Technical Levels

The spot was last seen trading around 108.90. A breakdown of support at 108.57 (200-DMA) would open doors for a sell-off to 108.00 (zero figure) and 107.77 levels (Nov 15 low). On the higher side, a move back above 109.00 could lift the spot higher to 109.89 (5-DMA) and 110.00 (zero levels).