USD/JPY extends slide to fresh multi-month lows near 105.00

• USD/JPY came under renewed bearish pressure in American session.
• US Dollar Index continues to push lower, closes in on 93.50.
• Wall Street’s main indexes turn north following a quiet start to the day.

The USD/JPY pair broke below 106.00 on Monday and fell sharply as the JPY capitalized on the risk-off flows at the start of the week. Although the pair recovered modestly during the European session, it came under renewed bearish pressure and was last seen trading at its lowest level since mid-March at 105.17, losing 0.9% on a daily basis.

USD selloff intensifies on Monday

In addition to the broad-based JPY strength, the heavy selling pressure surrounding the greenback also causes the pair to continue to edge lower. The US Dollar Index, which lost more than 1% last week, is now down 0.83% on the day at 93.56.

The only data from the US on Monday showed that Durable Goods Orders in June increased by 7.3% but failed to help the greenback find demand. 

Meanwhile, Wall Street’s main indexes, with the exception of the Nasdaq Composite, opened the day virtually unchanged before starting to push higher. With the S&P 500 and the Dow Jones Industrial Average both gaining around 0.6% on the day, the USD struggles to stage a recovery against its rivals. Nevertheless, improving market sentiment could weigh on the JPY and help the pair limit its losses as well.

In the early trading hours of the Asian session on Tuesday, Corporate Service Price Index data will be featured in the Japanese economic docket.

Technical levels to watch for