USD/JPY gives up gains
The US dollar is trading flat on the day against the yen at 123.15 after rising as high as 123.60 in European trading.
The pair remained near session highs at the start of US equity market trading but worries about Fed rate hikes have begun to hit stock markets hard and that's weighing on USD/JPY.
The S&P 500 is down 20 points, or 0.95%, to 2079. Today's decline erased last week's gain and now the stock market is flirting with an important pivot point at 2079.
I think a slide in USD/JPY is an opportunity to buy the pair. The bond market is unmoved by today's decline in stocks. Treasury yields are a much more important factor for USD/JPY than stocks.
USD 10-year yields are up 4 bps to 2.36% and 2s are up 0.4 bps to 0.89% and remain near 5-year highs.
Once the dust settles in the stock market (it may take a couple days) USD/JPY is in a position to creep higher.
