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USD/JPY falls as 10-year Treasury yields drop on strong bond auction
USD/JPY declined following a successful US 10-year Treasury note auction that yielded 4.033%, beating the 4.046% when-issued rate by 1.3 basis points. The $39 billion reopening auction showed strong demand, pushing Treasury yields lower and weighing on the dollar-yen pair. The stop-through result indicates robust appetite for US government debt despite elevated yield levels. Lower Treasury yields reduce the interest rate differential between the US and Japan, making the dollar less attractive versus the yen. Technical traders are watching key support at 142.50, with the pair vulnerable to further declines if yields continue to compress. The auction results suggest market participants remain comfortable with current yield levels, potentially limiting upside for USD/JPY in the near term as carry trade dynamics become less favorable.
USDJPY
Sentiment:
Negative
Source: Finnhub