USD/JPY remains stuck near 107.70 despite falling US T-bond yields
- 10-year US Treasury bond yield falls for the seventh straight day.
- Wall Street starts the day modestly higher on Tuesday.
- US Dollar Index stays in consolidation phase above 98.50.
The USD/JPY is fluctuating in a very narrow band on Tuesday and is struggling to set its next short-term direction. As of writing, the pair was trading at 107.67, adding 0.12% on a daily basis.
The data published from Japan today revealed that the business activity in the manufacturing sector contracted more than expected in September with the Jibun Bank Manufacturing PMI slumping to 48.9 in September from 49.3 in August. Additionally, Bank of Japan Governor Kuroda today said that the bank had become more keen to ease than before as risks to the economy is heightening. Despite the disappointing data and Kuroda's dovish remarks, the JPY stayed relatively resilient against the greenback.
Market sentiment stays neutral on Tuesday
The fact that the 10-year US Treasury bond yield is falling for the seventh straight day today seems to be helping the positively-correlated JPY find demand. However, Wall Street's main indexes started the day in the positive territory on Tuesday to suggest that risk-off flows can't yet dominate the markets.
On the other hand, the US Dollar Index is staying calm near the 98.60 handle, where it closed the previous day, and causes the pair to remain stuck in its range. Later in the session, the Conference Board's Consumer Confidence report will be looked upon for fresh impetus.
Technical levels to watch for