USD/JPY turns flat near 107.70 as DXY climbs above 100

• US Dollar Index renews multi-year highs above 100.
• Wall Street looks to open deep in negative territory.
• 10-year US Treasury bond yield adds more than 3% on Wednesday.

The USD/JPY pair dropped to a daily low of 106.76 during the early trading hours of the European session but didn't have a difficult time erasing its losses amid broad-based USD strength. As of writing, the pair was virtually unchanged on the day at 107.72.

DXY climbs above 100 on Wednesday

Earlier in the day, the JPY took advantage of the risk-off flows and gathered strength against its major rivals. The surging number of coronavirus infections globally continues to force investors to seek refuge. However, with resurfacing concerns over the USD funding stress driving the markets despite the Fed's measures to inject liquidity into markets, the pair reversed its direction.

At the moment, the US Dollar Index is at its highest level since April 2017 at 100.30, adding 0.8% on a daily basis.

Later in the session, investors will be paying close attention to Wall Street's performance. The US stock index futures fell sharply on Wednesday to suggest that the level-one circuit breaker could be triggered, once again, after the opening bell. Nevertheless, the USD valuation is likely to continue to dominate the action in the FX markets in the remainder of the day.

Technical levels to watch for