USD/JPY moves closer to 106.00 ahead of US ISM

• The pair reverts three sessions of losses and moves closer to 106.00.
• US 10-year yields rebounds from lows near 2.81% and retest 2.84%.
• US Non-farm payrolls and BoJ meeting next risk events this week.

After three consecutive sessions losing ground, the greenback has started on a better footing on Monday and is now lifting USD/JPY to the area of daily highs around 105.80.

USD/JPY focus on risk trends, data, BoJ

The now better sentiment around the greenback is helping USD/JPY to rebound from Friday’s lows in the 105.20 area, levels last visited in November 2016.

The recent pick up in the risk-off trade, month-end flows and rumours of ‘trade wars’ have given extra wings to the safe haven JPY in past sessions, sparking a sharp leg lower that seems to have found support in the 105.25/20 band for the time being.

Ahead in the week, Fedspeak and February’s non-farm payrolls (Friday) should keep the attention on the buck, while Japanese Q4 GDP figures (Thursday) and the BoJ interest rate decision (Friday) also remain poised to drive the sentiment in the pair.

In the speculative space, investors continue to trim their JPY net shorts during the week ended on February 27 according to the latest CFTC report, this time retreating to the lowest level since October 3 2017.

USD/JPY levels to consider

As of writing the pair is up 0.15% at 105.91 facing the next resistance at 106.96 (10-day sma) seconded by 107.41 (21-day sma) and finally 107.92 (high Feb.21). On the other hand, a breakdown of 105.25 (2018 low Mar.2) would aim for 102.54 (low Nov.3 2016) and then 101.15 (low Nov.9 2016).