USD/JPY Reacts to Decreasing Treasury Yields, Testing Key Level at 150.00
USD/JPY Slides alongside Treasury Yields. Tests 150.00
The US dollar is under some pressure as Treasury yield sink. US 10-year yields are down 6.1 bps to 4.15%, which is the lowest since February 13. That drop is weighing on USD/JPY, which is down 49 pips to 105.02.
Driving Forces Behind the Movement
China is speculated to be a key factor affecting market sentiment due to concerns over Taiwan and increased military spending. Moreover, Chinese equities have not seen a significant boost despite consumer stimulus talks.
- Risks associated with the upcoming ISM services report and factory orders data are also adding to the market uncertainties.
- BMO's fixed income team anticipates implications from the disappointing ISM Manufacturing data on the sustainability of economic strength for the following weeks and months.
- The Prices Paid component in the data is closely monitored for signs of core services inflation acceleration, impacting the Federal Open Market Committee's (FOMC) rate cut decisions and overall inflation complex.
Key Forecast on ISM Services Report
The ISM Services index is expected to show a slight decrease to 53.0 from the previous month's stronger-than-expected 53.4, indicating continued business growth at a more measured pace. Input cost readings will play a significant role in shaping FOMC's rate cut strategies given the sector's stable inflation dynamics.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.