The upbeat momentum in the USD/JPY pair once again lost steam near 110.20 region, and the major reverted towards 110 handle, as the US dollar embarked upon the corrective mode after the recent strength.
USD/JPY heading towards 5-DMA support at 109.93
The dollar-yen pair failed to sustain at higher levels and retreated sharply over the last hour, after the Japanese yen found support from BOJ Kuroda’s speech in parliament today, where he mentioned issue over exiting BOJ’s easy monetary policy. Kuroda’s comments came as a surprise to markets, as for the first time ever he spoke on rolling back the ongoing accommodative monetary policy regime. At the time of writing, USD/JPY trades at fresh session lows of 109.96, modestly flat on the day.
Moreover, a retreat in the Japanese equities also weighed down on the USD/JPY pair, with the Nikkei 225 index now up +1.61% versus +1.85% seen previously. Further, the US dollar edged lower versus its major competitors, correcting heavy gains booked yesterday on increased odds of a June Fed rate hike, also dragged the major lower. The USD index now drops -0.7% to 95.50 levels.
Meanwhile, markets continue digest comments from the BOJ Chief ahead of the US second-tier macro data due later in the NY session.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 110.19/25 (Daily & May 23 High). A break above the last, the major could test 110.50 (psychological levels). While to the downside, the immediate support is seen at 109.66/56 (10 & 50-DMA) and below that at 109 (round number).
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