USD/JPY extends daily slide, trades below 108.50
- USD/JPY looks to snap a four-day winning streak.
- US Dollar Index struggled to stage a meaningful rebound.
- 10-year US Treasury bond yield is down nearly 4% on Tuesday.
After advancing to its highest level since June at 109.24 earlier in the day, the USD/JPY pair turned south and continued to push lower during the American trading hours. As of writing, the pair was trading at fresh daily lows, losing 0.38% at 108.45.
Falling US T-bond yields weigh on USD
The unabated selling pressure surrounding the greenback on Tuesday doesn't allow USD/JPY to stage a meaningful rebound. In the absence of significant macroeconomic data releases, the sharp decline seen in the US Treasury bond yields caused the USD to weaken against its rivals. The US Dollar Index is currently consolidating its daily losses around 92.00, losing 0.35% on the day.
Following the latest 3-year Treasury note auction in the US, which produced a high yield of 0.355% vs. 0.196% in the previous auction, the 10-year T-bond yield is down nearly 4% on the day at 1.539%.
Additionally, the impressive performance of Wall Street's main indexes makes it even more difficult for the US to find demand. The S&P 500 and the Nasdaq Composite indexes are up 2.15% and 4.5%, respectively.
There won't be any macroeconomic data releases featured in the Japanese economic docket on Wednesday and the USD's market valuation is likely to continue to drive USD/JPY's movements. Later in the day, the Consumer Price Index (CPI) figures from the US will be looked upon for fresh impetus.
Technical levels to watch for