USD/JPY stays in consolidation phase above 108

• 10-year US T-bond yield struggles to extend recovery on Tuesday.
• US Dollar Index stays calm below the 97 handle following Monday's rally.
• Wall Street looks to open the day flat.

After closing the day with gains near 108.40, the USD/JPY pair is now having a difficult time setting its next short-term direction. As of writing, the pair was down 0.17% on the day at 108.25.

The upbeat market sentiment on the back of the U.S. and China reaching a trade truce over the weekend helped the pair start the week on a strong footing as the JPY as a safe haven struggled to find demand. Moreover, the sharp rebound witnessed in the 10-year US T-bond yield provided an additional boost to the pair.

With the trading action turning subdued amid a lack of significant macroeconomic events and geopolitical developments and the 10-year US T-bond yield staging a technical correction, the pair seems to be waiting for the next catalyst before making its next strong move. In the second half of the day, the only data release from the U.S. will be the ISM-NY's Business Conditions Index, which is unlikely to receive a meaningful reaction from the market.

Meanwhile, following Monday's rally, Wall Street seems to be set to open flat on Tuesday to reflect a neutral sentiment as the S&P 500 Futures stays unchanged ahead of the opening bell.

Technical levels to consider