The recent trajectory of the USD/JPY pair is being influenced by a combination of declining Treasury yields, hawkish signals from the Bank of Japan (BOJ), and increased demand for safe-haven assets. As Treasury yields decrease, the relative yield advantage of holding dollar-denominated assets diminishes, contributing to a weaker US dollar against the yen. Additionally, the BOJ's hawkish language, indicating potential interest rate hikes, is making yen-denominated assets more appealing to investors. This shift is further supported by geopolitical uncertainties, such as President Trump's tariff threats on Canada and Mexico, which are driving investors toward the stability of safe-haven currencies like the yen.
The interplay of these factors is expected to continue pressuring the USD/JPY pair downward, with traders anticipating a move toward the 200-day moving average just below 153. As of 21:40 on January 30, the 10-year Treasury yield (TNX) stands at 4.52, slightly down from its last close of 4.55, reflecting the broader market dynamics impacting currency movements.