USD/JPY treading water around 112.60

The greenback is alternating gains with losses vs. its Japanese peer at the beginning of the week, taking USD/JPY to a consolidative theme around 112.60 for the time being.

USD/JPY supported near 112.30

After bottoming out near 112.30 in early trade, the pair is now following a sideline pattern around 112.60, all amidst consolidation in the buck as investors continue to adjust to Friday’s results from US payrolls during last month.

Spot lost upside momentum and keeps the trade in tandem with yields of the US 10-year reference, which eased some ground after printing tops around 2.40% on Friday’s optimism after healthy wage inflation figures.

USD should stay under pressure ahead in the week in light of the FOMC minutes expected on Wednesday, where market participants will closely follow the statement and the Committee’s view on further tightening, balance sheet reduction and inflation prospects.

Further news around JPY, speculative net shorts climbed to the highest level since August 8 during the week ended on October 3, as shown by the latest CFTC report.

USD/JPY levels to consider

As of writing the pair is advancing 0.04% at 112.67 facing the immediate hurdle at 113.44 (high Oct.6) followed by 114.51 (high Jul.11) and finally 115.51 (high Mar.10). On the other hand, a break below 112.33 (low Oct.4) would open the door to 111.91 (200-day sma) and then 111.77 (61.8% Fibo of 114.51-107.33).