USD/JPY weaker, tests 110.20 on US yields

The greenback is prolonging the sell off vs. its Japanese counterpart in the second half of the week, dragging USD/JPY to fresh lows near 110.20.

USD/JPY tumbles in tandem with US yields

The pair is down for the third consecutive session so far today, returning to levels last seen in late April in the vicinity of 110.20 following the rout in US yields.

In fact, yields of the US 10-year reference have plummeted to levels last traded in mid-April just below the 2.20% handle as the ‘Trump trade’ continues to deflate among traders and uncertainty over the US political arena keeps growing bigger.

Earlier in the Asian session, Japanese advanced Q1 GDP figures have surpassed estimates while the usual weekly report on the labour market and the Philly Fed Manufacturing index are due across the pond seconded by the speech by Cleveland Fed L.Mester (2018 voter, hawkish).

USD/JPY levels to consider

As of writing the pair is losing 0.13% at 110.69 facing the next down barrier at 110.24 (low May 18) seconded by 109.73 (200-day sma) and then 109.59 (76.4% Fibo of 108.11-114.39). On the other hand, a breakout of 111.79 (55-day sma) would aim for 111.99 (38.2% Fibo of 108.11-114.39) and finally 112.13 (20-day sma).