USD/JPY hits fresh monthly lows below 113.00 amid weaker Treasury yields

• USD/JPY extends Monday’s sell-off below 113.00, monthly lows.
• The US dollar loses further ground in sync with Treasury yields.
• All eyes on Fed Chair Powell’s speech and US PPI figures for fresh impetus.

USD/JPY is pressuring monthly lows below the 113.00 levels, as bears remain in control amid the risk-off mood and renewed downswing in the US Treasury yields.

The rates on the market resume the recent downtrend following a temporary rebound on Monday, as the Fed’s patience on interest rates hike has led to the market’s repricing of the tightening expectations.

The benchmark 10-year US yields are down 1.30% on the day, currently trading at 1.478%. Meanwhile, resurfacing fears over the indebted Chinese property sector dent the appetite for riskier assets while boding well for the US Treasuries, in turn, knocking down the yields.

On the yen-side of the story, the news that the Japanese Prime Minister (PM) Fumio Kishida is looking to compile an economic stimulus package on November 19 helps the sentiment around the local currency,

Attention now turns towards the US Producer Price Index (PPI) data release and Fed Chair Jerome Powell’s speech for fresh trading opportunities.

At the time of writing, the pair is trading at 112.75, down 0.40% on the day.

USD/JPY technical levels to consider