USD/JPY: Bid in Asia, President Trump caused only a marginal repricing of Fed rate cut odds

• USD/JPY is flashing green for the third straight day. 
• American Dollar is bid on lower odds of aggressive Fed easing. 

USD/JPY is looking to break above 108.00 in the Asian session, having registered gains in the previous two trading days.

The pair eked out moderate gains on Monday even though President Trump ramped up pressure on the US Federal Reserve to ease, by tweeting that the 'very misguided' central bank should 'move now' to cut interest rates.

It is worth noting that the yield on the US 10-year treasury note fell to 2.02% on Trump's comments only to recover to 2.05% by day's end. The two-year yield, which is more sensitive to short-term rate cut expectations, also dropped to 1.79% only to rise back to 1.82%.

As of writing, the 10-year yield is trading at 2.06% and the two-year yield is seen at 1.83%.

The resilience in yields could be associated with the fact that Trump's tweets caused only minor repricing of the odds of an aggressive rate cut by the Fed on July 31. The futures market odds of a 50-basis point cut at the July meeting rose slightly to 30%. The odds had risen to 71% late Thursday.

As a result, the US Dollar may continue to push higher during the day ahead.

The bid tone, however, may weaken if the Asian equities print losses on lower odds of aggressive Fed easing. As of writing, the pair is trading at 108.00.

Technical levels