10-year Treasury yields are holding near the lows in the aftermath of the retreat yesterday, sitting around 3.61% today. The drop came after Fed chair Powell's speech, in which he relented on the more aggressive stance - a big change to what he had previously preached at Jackson Hole in August and at last month's FOMC meeting press conference.
As a result, the fall in bond yields has also dragged USD/JPY considerably lower with the pair now testing the 136.00 mark for the first time since late August. In Europe, 10-year German bund yields are also marked down by 11 bps to 1.831% now as we kick start the day.
For USD/JPY, the technicals point to a likelihood of a test of 135.00 again after the break of daily support around the region of 137.65 and 138.45 this week:
Of course, that would need further confirmation from tomorrow's US non-farm payrolls and any subsequent move to contest levels below the 200-day moving average (blue line) may perhaps also need confirmation from the key risk events coming up in the next two weeks here.
