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  • The pair tests fresh daily lows in the 110.90/80 band.
  • The down move in spot echoes the fall in US-10 year yields.
  • US Retail Sales expanded more than expected in July.

After reaching fresh multi-day tops in the 111.45/40 band in early trade, USD/JPY has now retreated to the area of daily lows around 110.90.

USD/JPY down on risk-off sentiment, yields

The pair has come under renewed selling pressure today, breaking below the 111.00 support once again and printing at the same time fresh daily lows.

The down move in spot came along a drop in yields of the US 10-year reference to the vicinity of 2.85% after climbing as high as the 2.90% neighbourhood earlier in the session.

Auspicious results from US Retail Sales during July failed to ignite a lasting reaction in the buck, while Industrial Production expanded below estimates 0.1% MoM and Manufacturing Production rose 0.3% MoM during last month, in line with prior surveys.

In the meantime, JPY remains vigilant on the situation around the Turkish Lira and the prospects of increasing demand for safer assets, which could derive in a deeper retracement of the pair.

USD/JPY levels to consider

As of writing the pair is losing 0.23% at 110.90 and a break below 110.12 (low Aug.13) would aim for 109.93 (200-day SMA) and then 109.36 (low Jun.27). On the upside, the initial hurdle aligns at 111.37 (21-day SMA) followed by 111.43 (high Aug.15) and finally 112.16 (high Aug.1).