USD/JPY remains on track to end week flat below 109.00

• USD/JPY fluctuates in a relatively tight range on Friday.
• US Dollar Index consolidates daily gains around 92.00.
• 10-year US T-bond yield is staying calm above 1.7% after earlier spike.

The USD/CAD pair edged lower during the European trading hours but didn't have a tough time reversing its direction in the second half of the day. After rising to a session high of 109.05, however, the pair went into a consolidation phase and was last seen trading at 108.86, where it was virtually unchanged on the day and the week.

DXY struggles to hold above 92.00

Earlier in the session, the US Federal Reserve said that it will not extend the temporary big bank leverage rule that is scheduled to expire by the end of March.

With the initial market reaction to this announcement Wall Street's main indexes started the day lower and the 10-year US T-bond yield, which lost as much as 2% earlier in the session, turned positive on the day. Consequently, the US Dollar Index started to push higher and touched its best level in more than a week at 92.16.

Nevertheless, with investors booking their profits ahead of the weekend, the 10-year T-bond yield retraced its climb and the DXY retreated to 91.90 area in the last hour.

Earlier in the day, the Bank of Japan (BoJ) left its policy rate unchanged at -0.1% as expected but announced that it will allow the 10-year Japanese Government Bond yield to move up or down 0.25% around its 0% target. This adjustment in the BoJ's yield curve control framework was largely expected and failed to trigger a meaningful market reaction.

Technical levels to watch for