USD/JPY tumbles to near 123.50 on falling US Treasury yields

• USD/JPY has slipped to near 123.50 as falling US Treasury yields weaken the greenback against yen.
• The 10-year US Treasury yields attracted offers after printing a three-year high at 2.66%.
• IIMF has advocated a prolonged ultra-loose policy for the BOJ.

The USD/JPY has slipped sharply in the Asian session at around 123.50 after juggling in a narrow range of 123.71-123.93. On Thursday, the asset is displaying a bearish open rejection-reverse trading session. The USD/JPY opened at 123.80, moved higher to 123.93, and then the yen bulls attacked the asset, which dragged the major sharply below the opening price to a low near 123.50.

The asset has been offered by the market participants on the subdued performance of US Treasury yields on Thursday. The 10-year benchmark US Treasury yields have retreated from the highs of 2.66% while the 2-year US Treasury yields, which are more sensitive to the interest rates, have faced more heat. The reason behind bears gaining control over the Treasury yields is that the market participants have already discounted the hawkish Federal Open Market Committee (FOMC) minutes.  

Meanwhile, the report from the International Monetary Fund (IMF) advocates that the Bank of Japan (BOJ) should stick to its ultra-loose monetary policy for a prolonged period. Higher commodity prices and a rebound in the consumption pattern may pressure BOJ to paddle the interest rates but a consistent dovish stance will be beneficial for the economy. Apart from that, IMF has cut Japan's 2022 economic growth projection to 2.4%, significantly lower than the forecast of 3.3% reported in January.