USD/JPY tumbles toward 108.00 on lower US yields

• US Dollar falls across the board as US yields hit fresh lows. 
• USD/JPY turns negative after being unable to break 108.30 and the 20-day SMA. 

The USD/JPY pair dropped below Asian session lows and fell to 108.04. As of writing it was trading at 108.05/10 with the negative tone intact. Earlier today, the pair was unable to break above the 108.30 area that became a strong resistance. 

The move lower took place amid a decline in US yields and also as equity prices in Wall Street extended losses. The 10-year yield fell to 2.07%, the lowest since July 11. The DOW JONES was falling 0.15% and the NASDAQ 0.17%. 

Another driver was the decline of the US Dollar over the last hours across the board. The DXY was falling 0.18% at 97.20, trimming one-third of yesterday’s gains. 

Levels to watch 

If the decline in USD/JPY continues, it might test the 108.00 area. Below the next critical level is 107.80 (weekly lows); a break lower could clear the way to more losses. On the upside, the 20-day moving average at 108.20 and 108.30 (daily high) form a barrier that if broken, should lead to further USD strength.