USD/JPY erases daily gains, turns flat near 111.40
- 10-year T-bond yield drops nearly 1%.
- Wall Street trades mixed ahead of Fed announcements.
- US Dollar Index stays in tight range a little below 96.50.
After rising to a 5-day high of 111.70 during the Asian session, the USD/JPY pair spent the majority of the day moving sideways near 111.50 before coming under a renewed bearish pressure in the first half of the NA session. As of writing, the pair was virtually unchanged on the day at 111.40.
Although the market action is turning subdued with investors waiting for the Fed to announce its monetary policy decisions and release the updated economic projections, the risk sentiment seems to be impacting the pair's action.
Major equity indexes in the U.S. started the day in the negative territory on Wednesday and the 10-year T-bond yield lost nearly 1% to erase this week's gains. The dismal market mood seems to be helping the JPY find demand as a safe-haven and stay resilient against the greenback. On the other hand, despite the sharp fall seen in the T-bond yields, the US Dollar Index is staying in a tight range below the 96.50.
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“The Fed’s narrative on interest rates has been clear since the dovish pivot at the January FOMC meeting: monetary policy is currently in a good place, and the FOMC will remain patient in assessing the need for any further adjustments to the policy stance,” HSBC analysts argue.
Technical levels