Yen’s selloff extends in US session as risk appetite dominate the US markets while treasury yields also surge. Sterling follows as the second weakest. On the other hand, Australian Dollar continues to lead New Zealand and Canadian Dollar higher. The news of US tariffs and China’s retaliation are generally shrugged off by investors.
At the time of writing, DOW is trading up 0.52%, S&P 500 up 0.60% and NASDAQ up 1.02%. In Europe, German DAX gained 0.40%, CAC up 0.21% but FTSE closed slightly down by -0.08%. Despite Dollar’s sluggishness, Gold continues to trade in tight range and struggles to hold above 1200 handle.
We’d attribute the selloff in Yen to strength in US treasury yields. In particular, rally is stronger in the long end. At the time of writing, 30-year yield is up 0.040, 10-year yield is up 0.032 and 5-year yield is up 0.022. This is certainly a development Fed officials would love to see.
10-year yield (TNX) took out 3.016 resistance this week and momentum persists. Now, further rise is likely towards 3.115 key resistance. We’re not too convinced that this key level could be taken out. So, we’d start to look for topping signal as TNX approaches 3.115. Accompanying it, we would likely see USD/JPY having a take on 113.17 resistance.
