USD/JPY moderately lower as treasury yields drop

Despite overnight recovery in the risk sentiment, USD/JPY is having a tough time extending gains above 101.00 levels in Asia; more so because the treasury yields are trading lower.

Strong resistance at 101.50

Strong US ISM non-manufacturing PMI helped treasury yields recover losses and lift USD/JPY pair. However, the pair’s NY session recovery from the low of 100.19 repeatedly failed to take out 101.40 - 101.50 levels.

Moreover, the 10-yr yield in the US dipped two basis points in Asia, which weakened the bullish tone in the US dollar. Meanwhile, the FOMC minutes released overnight failed to provide clarity with regards to rate hike expectations.

At the time of writing, the pair was trading around 101.10 levels. Pair remains at the mercy of the overall market sentiment in Asia and Europe. Later in the US session, weekly jobless claims could influence the pair.

USD/JPY Technical Levels

The immediate resistance is seen at 101.50 (hourly chart hurdle), above which the pair could target 101.85 (38.2% of 106.81-98.79). A violation there could yield 102.21 (10-DMA). On the other hand, a breakdown of support at 101.00 would open doors for a slide to 100.68 (23.6% of 106.81-98.79) and 100.00 levels.