USD/JPY unable to recover, looking toward November lows

• Japanese yen among top performs on Thursday amid lower bond yields.
• US Dollar still affected by the FOMC minutes.
• USD/JPY is about to post the lowest daily close in almost three months.

The USD/JPY is hovering around 138.15/20, holding a bearish tone on the back of a weaker Dollar but also amid a stronger Japanese yen. The pair bottomed at 138.04, the lowest since November 15, before bouncing modestly to the upside.

As long as USD/JPY remains under 138.50, more losses seem likely. The immediate support is the 138.00 zone followed then by the November low at 137.65. The pair is on its way toward the lowest daily close since August 26, another bearish sign.  

Dollar under pressure

The US Dollar has been under pressure since Wednesday. The FOMC minutes added to the negative tone. Expectations that the Fed might slow the pace of interest rate hikes as soon as the next meeting, December 13/14 weighed on the Dollar and boosted Treasuries. The US 10-year yield fell to as low as 3.68%  approaching the monthly low. The DXY is falling by 0.35%, trading at 105.75, headed toward the lowest daily close since mid-August.

The decline in bond yields boosted the Japanese yen across the board. The currency is among the top performers on a quiet session. Wall Street is closed due to a holyday in the US (Thanksgiving Day).

No economic data is due in the US for the rest of the week. In Japan, on Friday, the Tokio Consumer Price Index will be released. It will be a shortened session in Wall Street that will resume normal activity on Monday.

Technical levels