Powell reaffirmed that a September rate cut is very much on the cards and that is helping traders to turn the page from the kneejerk reaction to the Trump rally shooting. 10-year yields in the US have now erased the jump from yesterday, falling to near 4.18%. Yields are down 4.8 bps on the day currently.
With yields threatening a further drop, this could weigh more on the dollar as well moving forward. A break lower towards the March low of 4.038% and the 4% mark in general will likely drag the greenback much lower despite the declines already in July.
If so, that will be a welcome relief for Japan as it should also pin back USD/JPY a little more.
The next key risk event to watch now will be the US retail sales data later in the day.
