USD/JPY retraced a full 76.4% of its rally to 90.37 before stabilizing, a sickening turn of events for those trying to play the stronger dollar trend via USD/JPY. Looks like the lesson to be learned is that this is a EUR/USD move and the rest of the pairings are following but at their own pace.
Easing US interest rates in sympathy with the stronger dollar and weaker stocks and commodities are undermining the buck from a yield perspective and are helping to take a good bit of steam out of USD/JPY’s rally. 10 year Treasury notes are nearly 12 bp lower in yield from yesterday morning’s levels, now at 3.48%.
USD/JPY has bounced back to 89.99 from 89.70 afternoon lows.
