USD/JPY stays underpinned as weaker bond yields weigh on the yen
Japanese bond yields fall to their lowest levels since late 2016
The yields story is back in FX market as that is helping to contribute to the dollar demand seen so far to start the day. USD/JPY continues to inch higher as price now reaches 111.60 levels, moving past the key daily moving averages.
A reported consideration by the Japanese government to downgrade its economic assessment isn't helping the yen's cause but for me, the flows set out by yields today are what is proving to be the key driver in the currencies space; as seen in the aussie as well.
Risk sentiment remains rather tepid to start the day but should equities and Treasury yields inch higher later, just be wary of a potential move in USD/JPY to test the 112.00 handle again; where key resistance and offers currently lie.
Here's a look at Japanese bond yields across the curve: