USD/JPY hits fresh 6-week low, eyes 109.00

After a short-lived rebound, USD/JPY turned again to the downside and dropped to 109.22, reaching the lowest level since April. The pair remains near the lows, trading at 109.30/35, under pressure. 

It is falling more than a hundred pips on Tuesday, the worst day in three weeks. A rally in Treasuries boosted the yen in the market, particularly against the US dollar. The greenback remains weak and reached fresh low against commodity currencies during the American session while it is little changed versus the pound and the euro.

The US 10-year yield bottomed at 2.129%, the lowest since November 10. In Wall Street, equity prices, on average, are falling modestly. The Dow Jones is down 0.07% at 21,170 (it bottomed at 21,125) while the Nasdaq drops 0.03%. 

USD/JPY: Is risk what drives the pair? - BBH

Levels to watch 

Despite oversold readings, the bearish momentum is still strong. A recovery above the 20-hour moving average that stands at 109.70, could offer support to the US dollar and remove some negative momentum in the very short-term,

According to analysts from Brown Brothers Harriman, if USD/JPY breaks 109.20 it would target the late-April low near 108.00; “below there is 107.70, which is the 61.8% retracement of dollar's recovery off last June's  test on 99.00, and then 106.60.” They point out that the US dollar needs to reach 110.50 to stabilize the tone.