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  • USD/JPY recently marked a quick 11-pip up-move before erasing it to stay under 105.00.
  • Tokyo’s end of the week fixing may have taken clues from Japan’s National CPI data for an upswing.
  • Challenges to risk, BOJ’s hawkish stand keep the sellers hopeful.
  • An easy day after a rollercoaster ride warrants the bears to remain cautious.

USD/JPY stays depressed near 104.70 as Friday’s trading in Tokyo gains momentum. The yen pair dropped to the lowest since July 31 the previous day after the Bank of Japan (BOJ) upwardly revised the economic outlook while standing pat on policy changes. Though, the recent prints of Japan’s National Consumer Price Index (CPI) for August probe the bears around a multi-day low amid a quiet session in Asia.

Nothing major…

Although Japan’s August month’s National CPI slipped below 0.6% forecast and 0.3% previous readouts to 0.2% YoY, it no news as the Asian major has historically been struggling with stagflation. As a result, the yen bulls better concentrate on the BOJ’s upbeat outlook and the new PM Suga’s forward-thinking while catching a breather.

The risk catalysts are also in favor of the pair sellers as S&P 500 Futures decline 0.10% intraday as Fed’s hint for another stress test for large banks and the UK scientist group’s push for another national lockdown. Elsewhere, the US-China tussle also intensifies after the American Undersecretary for Economic Affairs Keith Krach’s scheduled visit to Taiwan.

Against this backdrop, the US dollar remains on the back foot after reversing from the one-week high the previous day.

Moving on, global market players may take a break from the volatile days amid a light calendar and continuation of risk factors. Even so, the US Michigan Consumer Sentiment Index for September, expected 75 versus 74.1 prior, may help determine near-term USD moves after the recently mixed American data probed the greenback’s rise on Thursday.

Technical analysis

With a clear break of a six-month-old support line, USD/JPY shows readiness to attack July month’s low of 104.18 unless bounce back beyond the support, now resistance, figures of 105.20.