USD/JPY bears seeking to break the US session lows near 114.70

• USD/JPY bears are sinking in their teeth as the pair consolidates. 
• The yen was a strong performer overnight in a risk-off session. 

USD/JPY bears are USD/JPY is holding in a tight 20 pip range so far in Asia. At the time of writing, the pair is trading at 114.85. Russia's attack on Ukraine continued to weigh on US and European equities and US bond yields fell sharply as risk appetite waned. However, the US dollar was little changed net versus fellow havens JPY and CHF but was stronger in the DXY.

DXY traded above 97.50 and is currently holding around 97.40 while the market is aggressively scaling back expectations for Fed tightening as the Dec-23 Fed Funds Futures contract rallied 25bp. However, markets are bracing for a drawn-out conflict that is supportive of the greenback. Expectations of a 50bp rise in fed funds this month have faded and investors are flocking to the safe haven of US Treasuries amid deteriorating liquidity. 

Meanwhile, US bond yields fell significantly following the deterioration of global risk sentiment, as the conflict in Ukraine escalate further. The curve steepened as 2-year government bond yields fell from 1.45% to 1.34%, and the 10-year government bond yields slid from 1.86% to 1.68%. This was the lowest level since early January.

Meanwhile, Fed Chair Powell will testify before the House Financial Services Committee, delivering the Semi-annual Monetary Policy Report to Congress. There will also be a focus on the ADP employment change that is set to rebound from the omicron decline in January. This comes before the end of the week's Nonfarm Payrolls data. The Federal Reserve’s Beige Book will also be looked into for an update on current economic conditions. Before then, markets will be turning to US President Joe Biden who will be delivering his first State of the Union address with a focus on Ukraine and cost of living. USD/JPY is set on the downside for the current hour with 114.70 vulnerable as being the US session low.