The slide came amid a healthy dose of risk aversion following a rise in the Australian unemployment rate and an interest rate cut by the Bank of Korea during the last Asian session, which weighed on market sentiment throughout the day.
From Valeria Bednarik, Chief Analyst at FXstreet.com: “In bigger time frames the outlook is also bearish despite no clear strength comes from technical readings at the time being: price needs to ease below key 78.80 level to attempt a retest of the 78.00/40 area,” she says.
USD/JPY last trades around 79.30. Ms. Bednarik identifies support levels at 79.10, 78.80 and 78.40, while resistance levels lie at 79.45, 79.80 and 80.10. If the selling pressure continues on risk-off Friday, Danske Bank explains, “A significant appreciation of the JPY is expected to be countered by more aggressive monetary easing and eventually FX intervention.”