USD/JPY stays in tight trading range below 111.50

• US Dollar Index sits below 97 on Wednesday.
• European stocks stay relatively quiet.
• Coming up: PPI and durable goods orders from the U.S.

For the second day in a row, the USD/JPY pair is trading in a very tight range below the 111.50 handle and is struggling to determine its next short-term direction. As of writing, the pair was virtually unchanged on a daily basis at 111.35.

Earlier in the day,  Japan’s Regional Banks Association Chief Takashige Shibato  argued that the Bank of Japan needed to take into account the side-effects of the ultra-loose monetary policy and noted that it’s been six years since the BoJ claimed that the 2% inflation target would be reached in two years. Meanwhile, the only data from Japan showed that the Tertiary Industry Index rebounded to 0.4% in February from -0.5% in January but failed to help the JPY gather strength.

On the other hand, ahead of the PPI and durable  goods orders data from the U.S., the US Dollar Index is posting losses for the fourth straight day and is sitting below the 97 mark, keeping any potential gains limited.

The risk perception is not providing any directional clues to the pair either on Wednesday. The S&P 500 Futures is up only 0.05% on the day to suggest a flat opening on Wall Street and major European equity indexes are staying quiet near yesterday’s closing levels.

Technical levels to consider

The initial resistance aligns at 111.50 (200-DMA) ahead of 111.85 (Mar. 7 high) and 112.15 (Mar. 5 high). On the downside, supports are located at 111.20 (20-DMA), 110.90 (100-DMA) and 110 (psychological level).