USD/JPY edges lower toward 107 handle as US T-bond yields extend fall

• US Dollar Index struggles to pull away from the 99 mark.
• 10-year United States (US) Treasury bond yield extends slide on Thursday.
• Coming up: Service sector Purchasing Managers' Index (PMI) data from the US.

The USD/JPY pair closed the previous two trading days in the negative territory and continued to push lower on Thursday amid a lack of fundamental drivers that could have helped the market sentiment recover. As of writing, the pair was trading at 107.04, erasing 0.13% on a daily basis.

Markets remain risk-averse

Earlier this week, the disappointing Manufacturing PMI data from the US and uninspiring macroeconomic data releases from the euro area revived concerns over a potential slowdown in the global economy and caused investors to flee to safer assets.

Following Wednesday's sharp drop witnessed in Wall Street's main indexes, major Asian stock markets pushed lower on Thursday to show that risk-off flows remain in control of the market action. Additionally, the 10-year US Treasury bond yield, which lost 2.15% on Wednesday, extended its slide and was last seen at 1.573%, losing 2 on the day.

Meanwhile, the bearish pressure surrounding the US T-bond yields also weigh on the Greenback and make it difficult for the pair to stage a recovery. Ahead of the Institue for Supply Management's (ISM) and Markit's PMI reports for the service sector, the US Dollar Index is posting small daily losses near the 99 handle.

In addition to the data, investors will be paying close attention to the performance of Wall Street.

Technical levels to watch for