The greenback is trading on the defensive vs. its Japanese counterpart at the beginning of the week, now taking USD/JPY to the low-109.00s ahead of the opening bell in Wall St.
USD/JPY looks to US yields
After briefly testing fresh daily lows in the 109.00 neighbourhood, the pair seems to have regained some attention against the backdrop of dull markets following the Jackson Hole Symposium last week.
Spot continues to trade in tandem with yields in the US money markets, where the 10-year benchmark is now hovering over the 2.17%, close to Friday’s lows in the boundaries of 2.16% and in the area of multi-week lows.
Further news around the safe haven JPY saw BoJ Governor H.Kuroda defending the current bond-buying programme at the recent symposium, although risk aversion trends in response to geopolitical jitters remain poised to cap any sustainable upside.
In the US data front, wholesale inventories, July’s goods trade balance and the Dallas Fed manufacturing index are all due later in the NA session.
USD/JPY levels to consider
As of writing the pair is retreating 0.17% at 109.17 and a breach of 108.58 (low Aug.18) would aim for 108.11 (low Apr.17) and finally 102.54 (low Nov.3 2016). On the upside, the immediate hurdle emerges at 109.53 (10-day sma) followed by 109.84 (21-day sma) and then 110.85 (38.2% Fibo of 114.51-108.58).