USD/JPY hits a session low of 108.78
Equities are hitting fresh lows on the session with E-minis down by nearly 1% on the day, while Treasury yields are at their lows as well. 10-year yields are down by 4.5 bps to 2.167% and more headlines like these certainly won't help to ease the risk mood.
For USD/JPY, sellers are well in control of the pair and with a break below support under 109.00, they will be aiming towards the 31 January low @ 108.50 next.
It's tough to argue how much more the pair can drop at this point given that we've moved so much already in a day. But the premise before today's move is that it was puzzling to see USD/JPY hold above 109.00 given the fall in yields this week.
I reckon the spot to watch out for is the 200-day moving average in the S&P 500 again. Buyers have been clinging on to that level over the past two days for support, but if that gives way later, the floodgates will open and I reckon it will lend itself to further yen strength as we close out the week.
