USD/JPY drops to fresh 10-day low below 109.30
- USD/JPY is edging lower at the start of the week.
- 10-year US Treasury bond yield turns south after opening with a bullish gap.
- US Dollar Index stays afloat above 90.00 on Monday.
The USD/JPY pair reached its highest level since early April at 110.34 last week but lost 80 pips on Friday after the USD came under strong selling pressure on the uninspiring May jobs report. At the start of the new week, the pair continues to edge lower and was last seen trading at its lowest level in more than a week at 109.22, losing 0.25% on a daily basis.
Eyes on US T-bond yields
US Treasury bond yields fell sharply on Friday and caused USD/JPY to edge lower as the US Bureau of Labor Statistics showed Nonfarm Payrolls rose less than expected. Although the benchmark 10-year US T-bond yield opened with a bullish gap on the back of US Treasury Secretary Janet Yellen's hawkish comments, it struggled to preserve its momentum. At the moment, the 10-year US T-bond yield is still up nearly 1% at 1.568%.
Meanwhile, the US Dollar Index is fluctuating in a relatively tight range above 90.00, allowing US T-bond yields' performance to impact USD/JPY's movements.
There won't be any high-tier macroeconomic data releases from the US in the remainder of the day. On Tuesday, first-quarter Gross Domestic Product (GDP) data will be featured in the US economic docket. Investors expect the Japanese economy to contract by 1.2% on a quarterly basis.
Technical levels to watch for