- The pair trades within a familiar range around the 111.00 handle.
- US 10-year yields testing session tops around 3.08%.
- FOMC minutes, ECB minutes next salient events later in the week.
The generalized softer tone around the greenback is now prompting USD/JPY tp drop to the 111.00 neighbourhood, all amidst a narrow trading range.
USD/JPY upside capped near 111.20
After recording fresh multi-month peaks near 111.40 at the beginning of the week, spot has now sparked a correction lower and returns to the 111.00 neighbourhood, where it seems to have found some decent contention.
The down move in the pair comes despite yields of the key US 10-year reference managed to rebound and test the 3.08% level, or daily highs, which acted as quite a tough hourly barrier as of late.
Governor H.Kuroda said in early trade that the central bank could signal some exit plans from the ultra loose monetary policy stance once prices pick up.
In the meantime, the FOMC minutes due tomorrow should be the salient event this week along with the speech by Fed’s J.Powell on Friday.
USD/JPY levels to consider
As of writing the pair is losing 0.09% at 110.96 and a break below 110.21 (200-day sma) would target 109.74 (21-day sma) en route to 108.64 (low May 4). On the other hand, the next hurdle lines up at 111.39 (high May 21) would open the door to 111.50 (high Jan.18) and finally 113.39 (2018 high Jan.8).