USD/JPY drops below 117.00 as US yields decline

The Japanese yen gained momentum in the currency market, despite rising equity prices on Wall Street. A recovery in US bonds favored the yen. USD/JPY broke below 116.95/117.00 (Asian session low) and dropped to 116.63 hitting the lowest level since the Federal Reserve decision to raise rates. 

The pair remains near the lows as the US 10-year yields drop to 2.55%. In the US, the Dow Jones was rising 0.30% and the Nasdaq was up 0.70%. 

The US Dollar is still trading 150 pips above the level it had before the FOMC decision but it is falling for the second trading day in a row as it continues to retreat after hitting last Thursday at 118.65, the strongest January. 

Technical levels 

To the downside, support levels might be located at 116.60/65 (daily low), 116.10 (Dec 12 high) and 115.45/50 (Dec 13 high). On the flip, side resistance might be seen at 116.95/117.00 (Asian session low), 117.35 (20-hour moving average) and 117.95 (daily high).