USD/JPY holds steady above 110.00 ahead of Wall Street's opening bell
- USD/JPY is moving sideways a little above 110.00 on Monday.
- US Dollar Index gathers bullish momentum at the start of the week.
- 10-year US Treasury bond yield is staying in the negative territory.
The USD/JPY pair closed the fourth straight week virtually unchanged around 110.00 on Friday and continues to struggle to find direction on Monday. After spending the Asian trading hours in a very narrow range around 109.90, the pair gained traction in the European session and turned positive on the day. Nevertheless, USD/JPY's upside remains limited in the absence of significant fundamental drivers and it was last seen posting small daily gains at 110.06.
US T-bond yields edge lower
The renewed USD strength at the start of the week seems to be helping USD/JPY hold above 110.00. The US Dollar Index (DXY) is currently rising 0.2% on the day at 92.82. However, major equity indexes remain on track to start the day higher, suggesting that the risk-positive market environment could force the DXY to retrace its daily climb. At the moment, the S&P 500 Futures are up 0.6% on a daily basis.
In the meantime, the benchmark 10-year US Treasury bond yield is down 1% on the day. In case yields continue to push lower after the American session goes underway, USD/JPY could find it difficult to cling to its gains.
On Tuesday, the Industrial Production and Capacity Utilization data for July will be featured in the Japanese economic docket, which are likely to be ignored by market participants.
Technical levels to watch for