USD/JPY on a steady retreat towards 110.50, risk-off weighs

The US dollar continues to trade on the back foot against its major peers for the second straight session, prompting the bears to drag USD/JPY back to test the mid-point of 110 handle.  

USD/JPY unimpressed by subdued Treasury yields

The spot extends its post-NFP corrective slide, as markets take profits of the table on their USD longs ahead of the crucial US CPI report due on the cards this Friday.  The USD index/news/us-dollar-appears-weak-around-9320-201708080728 trades largely flat-lined around 93.20, down -0.10% on the day. Meanwhile, the US yields also trade directionless amid the latest dovish Fedspeaks and rising inflation expectations in the US.

Moreover, the demand for the safe-haven Yen remains intact, as the European equities track their Asian counterparts lower, while awaiting corporate earnings results in otherwise thin summer trading.

More so, comments from the former BOJ Deputy Governor Iwata also continues to lend support to the Yen bulls. Iwata said earlier today that the BOJ should scale back ultra-massive stimulus program before inflation hits 2%.

Amid a lack of first-tier macro updates from the US docket today, focus will remain on the US JOLTS job openings data for fresh momentum.

USD/JPY Technical levels                 

To the topside, a daily close above 20-DMA located at 111.07 would shift risk in favor of a re-test of 111.45 (100-DMA) beyond which 111.71 (50-DMA) would be back on sight. A break below 110.37 (daily S3) would open doors for 109.82 (Aug 4 low). A break lower would yield a test of 109.50 (psychological levels).