USD/JPY falls to session low as yen gains on further drop in Treasury yields
USD/JPY touches a low of 110.36 on the session
Yen pairs are advancing in early morning trade in Europe as Treasury yields come back into focus and we're seeing a further drop across the curve to start the day. Japanese markets were closed so this is the first glimpse we're seeing of yields today.
US 10-year yields are down by 1.4 bps to 2.51% currently and that's driving a move higher in the yen. USD/JPY will now look towards support around 110.00-10 next with the figure level being a key psychological barrier for buyers/sellers in the near-term.
Although Treasury yields remain well above their counterparts in Europe and Japan, the drop here is seeing yields fall to their lowest level since early 2018:
And that is putting added pressure on the dollar. That said, the yields story with the dollar isn't one that tends to last too long if it begins to settle in a range. But for now, I would expect it to still be an issue for the greenback this week since we're fresh off the FOMC meeting decision yesterday.