USD/JPY turns upside down as US Dollar slumps

• USD/JPY slides to near 149.30 as the US Dollar underperforms its peers.
• The US Dollar weakens as US bond yields plunge sharply.
• Hot Japan's National CPI data for January boosts BoJ hawkish bets.

The USD/JPY pair gives up its intraday gains and turns negative in Tuesday's North American after failing to hold above the psychological figure of 150.00 earlier in the day. The asset declines to near 149.30 as the US Dollar (USD) falls sharply due to a significant decline in bond yields.

10-year US Treasury yields are down 1.7% to near 4.32% at the press time. The demand for US bond yields rose significantly due to an increase in market expectations that the Federal Reserve (Fed) will resume the policy-easing cycle in the June policy meeting.

According to the CME FedWatch tool, the likelihood for the Fed to cut interest rates in the June meeting has increased to 76% from 56% a week ago. The tool also shows that the Fed will keep interest rates steady in the current range of 4.25%-4.50% in the March and May meetings.

Fed dovish bets have accelerated after the release of the United States (US) flash S&P Global PMI data for February, which showed that the service sector activity declined for the first time after 25 months.

Meanwhile, the Japanese Yen (JPY) has been outperforming for the past few weeks amid firm expectations that the Bank of Japan (BoJ) will raise interest rates again this year. BoJ hawkish bets are based on accelerating inflationary pressures. Japan's headline National Consumer Price Index (CPI) accelerated to 4% in January, the highest level seen in two years.