USD/JPY hits a bit of an air pocket, dollar dragged as a result

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USD/JPY hits a bit of an air pocket, dollar dragged as a result

The greenback is keeping lower across the board with the drag stemming from a slight retracement in USD/JPY price action on the day after the pair hit a high of 129.40, before falling back to 128.40 at the moment.




As the pair gradually approaches the 130.00 mark, intervention talk is growing and Japanese officials are still continuing to offer some verbal jawboning as seen here. The BOJ is also seen once again having to step in to maintain its yield curve control policy, defending the implicit 10-year JGB yields cap at 0.25%.But as mentioned countless times on the way up since 120.00, there isn't much that Japan policymakers can do at this point considering the divergence in monetary policy as well as the continued rout in the bond market.Looking at Treasuries, 10-year yields are up another 2.3 bps to 2.938% now as the surge higher in yields continues to be rather unrelenting. That will in turn apply further upside pressure to yen pairs, so this bit part retracement in USD/JPY is but a light speed bump perhaps. Even when you look at the technicals, it hardly offers a dent.But for now, the dollar is dragged down slightly but noting really too significant. The greenback has been trading rather firm over the past few sessions so this slight drop isn't much.EUR/USD is looking to keep above 1.0800 while GBP/USD is trying to hang on at 1.3000 in a push back up to 1.3040. Buyers are slowly wrestling back for some near-term control but we will see if the momentum can keep up.

Source: USD/JPY hits a bit of an air pocket, dollar dragged as a result

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