USD/JPY trims losses, back near 109.40

The greenback stays on the defensive today, now dragging USD/JPY to the lower end of the range near 109.20/10 although regaining some buying interest afterwards.

USD/JPY weaker on US yields

The weak performance of US yields keep weighing on the pair, which is retreating for the second week in a row and testing levels last seen in late November in the low-109.00s.

The 10-year reference stays as the main driver for the pair’s price action for the time being, currently managing to gain some attention after yesterday’s multi-month lows in sub-2.15% levels.

Despite the tepid bounce, Treasuries remain under pressure following the inability of the Trump’s administration to deliver its electoral promises, particularly those involved with fiscal stimulus. In addition, yields are poised to stay under pressure as China could intensify its purchases of US bonds.

Nothing noteworthy in the data space today, while former FBI Director J.Comey is expected to testify tomorrow before the Senate Intelligence Committee and Japanese Q1 GDP figures also due for release on Thursday.

USD/JPY levels to consider

As of writing the pair is losing 0.09% at 109.31 and a breakdown of 109.12 (low Jun.7) would aim for 108.69 (low Apr.20) and finally 108.11 (2017 low Apr.17). On the other hand, the next hurdle lines up at 110.42 (200-day sma) followed by 110.51 (61.8% Fibo of 108.11-114.39) and finally 111.13 (55-day sma).