USD/JPY clocks an 8-week low of 109.83 as the 10-yr US T-yield shed 3bps

The Dollar-Yen pair hit an 8-week low of 109.83 in Asia as the 10-year US Treasury yield fell more than three basis points [bps] to 2.246%. 

The growing tensions in the Korean Peninsula strengthened the demand for the Japanese Yen, gold and the treasuries. The demand for the Yen also spiked after ex-BOJ Kuichi said the central bank may consider policy normalization and may change the 10-year yield target to 3-5 years. 

Moreover, the Yen’s safe haven appeal has ensured the spot remains under pressure and ignores the US JOLTS job report, which showed the job openings jumped to a record high in June, outpacing hiring. 

Dips below 110.00 to be short lived?

Ivan Delgado, Chief Editor at FXStreet says, “the Relatively low VIX should contain depreciation around 110.00 psychological round number”. He adds, “Break below 110.00 may be seen as an opportunity to build long-sided business”. 

USD/JPY Technical Levels

FXStreet Chief Analyst Valeria Bednarik writes, “the pair keeps trading within Fibonacci levels, trapped most of this Tuesday between the 23.6% and the 38.2% retracement of the latest daily decline between 112.18 and 109.84, with scope to test this last on a break below the daily low of 110.24. Technical readings in the 4 hours chart support such decline as the 100 SMA extended its slide above the current level, now around 111.10, while the Momentum indicator entered bearish territory with a strong bearish slope and the RSI indicator resumed its slide after failing to surpass its mid-line, currently at 46.”