USD/JPY trades at fresh 12-day lows near 107.20

• USD/JPY extends its daily slide toward 107.00 ahead of FOMC.
• US Dollar Index remains in the red near 96.20.
• 10-year US Treasury bond yield loses nearly 6% on Wednesday.

After closing the first two days of the week in the negative territory and losing nearly 200 pips during that period, the USD/JPY pair extended its slide on Wednesday and touched its lowest level in 12 days at 107.17. As of writing, the pair was trading at 107.25, losing 0.43% on a daily basis.

USD remains on the back foot ahead of FOMC

The broad-based selling pressure surrounding the greenback and the falling US Treasury bond yields continue to weigh on the pair.

With the 10-year T-bond yield losing nearly 6% on the day, the US Dollar Index is down 0.2% at 96.18 as investors are eagerly waiting for the FOMC to announce its rate decision and to release its updated economic projections.

Fed Preview: Nine major banks expectations.

Previewing the FOMC event, “the state of the economy is so fragile that the Fed probably sees the risks/uncertainty of introducing (unconventional) forward guidance now as too big, said Nordea analysts. "Instead, Powell will likely reiterate his words from last time that the Fed is ready to do more if needed and that this ‘more’ may for now be linked to the liquidity and credit facilities.”

Technical levels to watch for