USD/JPY intermarket: Looking at US yields

USD/JPY remains near daily highs, above 107.00 recovering after falling sharply on Friday after the release of the NFP report, that showed significant lower-than-expected numbers. Yellen said today that  “one should never attach too much significance to any single monthly report”, but Fed rate hike expectations changed significantly after jobs figures.

During today’s American session the pair drooped after Janet Yellen speech and bottomed at 106.81 but then bounced to the upside, rising back toward daily highs. The yen remains among the worst performers in the market

The weakness of the Japanese currency could be attribute to and improvement in risk appetite. Equity prices in Wall Street, after an intraday bearish correction turned again to the upside and climbed further. The Dow Jones is at daily highs moving toward 18.000, up 0.75% so far today, while Nasdaq is now up by 0.67%.

US bond yields continue to explain price action movements in the USD/JPY pair. The 10-year yield started at 1.70% and now is at 1.72% (below daily highs, pointing to the upside like USD/JPY). Since June 1st the yield dropped from 1.83 to 1.70 (May low) while during the same time USD/JPY fell from 110.70 to 106.35 (today’s low localed slightly above the weakest level of May).