USDJPY is decoupling from US Treasury yields

USDJPY has broken its traditional inverse correlation with US Treasury yields, driven by a decline in the US dollar following the Federal Reserve’s meeting and Chairman Jerome Powell’s remarks at the Jackson Hole symposium.

Powell’s comments hinted at a potential interest rate cut in September, a prospect further reinforced by statements from Federal Open Market Committee member Mary Daly, who also leaned towards a rate reduction at the upcoming meeting.

A batch of economic data has added to the pressure on the dollar, indicating a rise in US consumer confidence in August. The Conference Board’s consumer confidence index climbed to 103.3 in August, up from 101.9 in the previous month, suggesting a boost in risk appetite across global financial markets.

As a result, the dollar-yen pair declined to 143.93, compared to the previous day’s close of 144.51. The pair traded in a range between 143.91 and 145.17.