With the US slipping into a supposed technical recession and punters pulling back on Fed pricing - at least in terms of aggressiveness - that is seeing yields fall alongside the dollar as we look to wrap up the trading week.

While not exactly hogging the spotlight, I would still argue that the bond market is still the most important spot to watch this week. And that has certainly translated to the most meaningful flows in FX with the Japanese yen surging higher since the FOMC meeting decision.

The drop in USD/JPY below 135.00 yesterday is exacerbating a further decline today with the low earlier briefly touching below 133.00 (the low was 132.99).

Going back to the chart above, that is quite a technical signal as 10-year Treasury yields are breaking below the neckline support (white line), the 100-day moving average (red line), and the swing lows since May near 2.70%.

As recession fears amp up, this could be what USD/JPY needs to produce a meaningful turnaround in sentiment after having seen the yen get battered ever since March.