USD/JPY breaks below 134.00 as Wall Street extends losses

• US yields hit fresh weekly lows due to risk aversion. 
• Japanese yen benefits from falling equity prices in the US amid banking concerns. 
• USD/JPY drops for the third consecutive day, below the 20-day SMA. 

The USD/JPY has broken lower and tumbled to 133.79, reaching its lowest level in six days. The pair remains under pressure amid risk aversion, with US regional banks taking a hit.

Although the US Dollar experienced a modest rebound following US Q1 productivity report, it quickly faded after Wall Street's opening bell. US stocks are falling again, with regional banks tumbling. Wednesday's Federal Reserve rate hike seems like old news already.

The deterioration in market sentiment is driving demand toward Treasury bonds. The US 10-year yield is at 3.33%, while the 2-year is at 3.79%, both at one-month lows. 

The context of lower US yields and risk aversion is boosting the Japanese yen across the board during the American session, pushing USD/JPY down, extending weekly losses.

The pair is falling for the third consecutive day. From Tuesday's top, it lost almost 400 pips. The price is testing levels below 134.00 and under the 20-day Simple Moving Average (SMA). The next strong support area is seen around 133.50. A recovery above 135.00 would alleviate the bearish pressure.

Technical levels