• US Dollar weakens across the board following lower-than-expected ISM Service PMI.
• US yields decline sharply after data, benefiting the Yen.
• USD/JPY extends reversal from six-day highs.

The USD/JPY experienced a sharp drop below 140.00 after the release of US economic data that weighed on the US Dollar. Within a few minutes, the pair lost more than 50 pips, reaching a fresh daily low at 139.25. It remains near the lows, under pressure.

Data triggers more losses in USD/JPY

The May S&P Global Services PMI was revised down from 55.1 to 54.9. More importantly, the ISM Services PMI for May came in at 50.3, the lowest level since May 2020, falling short of expectations of 51.5 and below April's figure of 51.9. The Prices Paid Index also fell from 59.6 to 56.2, and the Employment Index dropped to 49.2, indicating contraction.

In addition, a separate report showed that Factory Orders rose by 0.4% in April, below the market consensus of 0.5%.

These figures triggered weakness in the US Dollar across the board. The US Dollar Index dropped from 104.30, hitting daily lows below 104.00. US Treasury yields also turned negative, with the 10-year sliding from 3.75% to 3.66% and the 2-year from 4.55% to 4.43%.

The rally in Treasuries boosted the Japanese Yen, which is also benefiting from the slide in equity prices on Wall Street. As a result, the yen is one of the top performers so far on Monday.