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A bearish technical pattern and a narrowing US-Japan yield differential indicate USD/JPY could test the support at 112.23 in the next 24 hours or so.  

The pair’s previous 4-hour candle closed below 111.64, confirming a double top breakdown. The RSI on the 4-hour chart has dropped to 50.00, having created a bearish divergence two days ago.  

Further, the spread between the 10-year US and Japanese government bond yields dropped two basis points yesterday, having narrowed six basis points in the previous two trading days.  

So, the pair will erase minor gains above 111.64 seen at press time, opening doors for a deeper drop toward 111.23.

4-hour chart

Trend: Bearish

USD/JPY

Overview:
       Today Last Price:  111.69
       Today Daily change: -7  pips
       Today Daily change %:  -0.06%
       Today Daily Open:  111.76
Trends:
       Daily SMA20:  110.86
       Daily SMA50:  109.88
       Daily SMA100:  111.37
       Daily SMA200:  111.38
Levels:
       Previous Daily High:  111.92
       Previous Daily Low:  111.61
       Previous Weekly High:  112.08
       Previous Weekly Low:  110.35
       Previous Monthly High:  111.5
       Previous Monthly Low:  108.73
       Daily Fibonacci 38.2%:  111.73
       Daily Fibonacci 61.8%:  111.8
       Daily Pivot Point S1:  111.6
       Daily Pivot Point S2:  111.45
       Daily Pivot Point S3:  111.29
       Daily Pivot Point R1:  111.92
       Daily Pivot Point R2:  112.08
       Daily Pivot Point R3:  112.23