USD/JPY holds toward weekly highs in opening hour of Tokyo's trade

• USD/JPY has stuck to a tight range on the 108 handle between 108.19 and 108.32.
• U.S. Retail Sales support the U.S. Dollar, dialling down Fed cut expectations. 

USD/JPY was supported overnight and rallied to a weekly high of 108.37 on solid U.S. data, The US 2-year treasury yields climbed from 1.84% to 1.87% on the Retail Sales, (see below), while 10-year yields climbed from 2.09% to 2.14% before falling back to 2.10% as U.S. stocks stumbled, unable to attract further demand following yesterday's closing record highs. 

As for US data, US Retail Rales beat expectations in June, rising 0.4% m/m (0.2% expected) with core sales up a solid 0.7% (0.3% expected):

 "US retail sales beat expectations in June, rising 0.4% m/m (0.2% expected) with core sales up a solid 0.7% (0.3% expected). On a 3-month annualised basis, sales are up 7.5% with ex-auto and gas up 6.0%. The gains were fairly broad-based with only electronics seeing a small pullback, suggesting that the consumer is alive and well. Factories were looking less rosy in June though, with industrial production flat on the month, a bit weaker than expected,"

analysts at Westpac explained. 

Powell rinses and repeats: 

Federal Reserve Chairman Jerome Powell was delivering a speech on "Aspects of Monetary Policy in the Post-Crisis Era" at the "French G7 Presidency 2019 - Bretton Woods: 75 Years Later, Thinking About the Next 75" event in Paris, France.  He said that the FOMC participants have raised concerns about a more prolonged shortfall in inflation below our 2 percent target and argued that US growth appears to have moderated.

Federal Reserve Chairman Jerome Powell: We expect growth to remain solid, labour markets to stay strong

USD/JPY levels

Valeria Bednarik, the Chief Analyst at FXStreet, explained that the USD/JPY pair has recovered up to a 50% retracement:

"USD/JPY pair has recovered up to the 50% retracement of its latest daily slide at 108.38 but remains within familiar levels.

In the 4 hours chart, the pair has settled above all of its moving averages, which remain directionless and confined to a tight range, reflecting the lack of directional conviction." 

"Technical indicators in the mentioned chart recovered up to their mid-lines, losing upward strength around them. The pair peaked last Friday at 108.60 the level to surpass to build a more solid bullish case in the upcoming sessions."