USD/JPY eases from tops post-US PPI, turns neutral around 111.00 handle
| • A modest USD uptick helps recovery early lost ground to 2-week lows.
• The up-move losses steam after softer-than-expected US PPI figures.
The USD/JPY pair struggled to build on its early recovery move and quickly retreated around 15-20 pips during the early North-American session.
The pair did get a minor bump from some renewed US Dollar buying interest. This coupled with a goodish uptick in European equity markets further weighed on the Japanese Yen's safe-haven appeal and provided an additional boost.
The uptick already seems to have run out of steam following the release of softer than expected US PPI figures for the month of July, with the headline print coming in at +3.3 y/y and core PPI also slipping back from seven-year highs.
Meanwhile, a better-than-expected initial weekly jobless claims data, coming in at 213K, a decrease of 6,000 from the previous week, did little to provide any bullish impetus, albeit might help limit deeper losses.
Market participants now look forward to a new round of US-Japan trade talks for some fresh impetus ahead of Friday's more relevant US consumer inflation figures.
Technical levels to watch
The 110.70-65 region might continue to act as an immediate support, which if broken might turn the pair vulnerable to test the key 110.00 psychological mark with some intermediate support near the 110.35 area.
On the flip side, the 111.20 area now seems to have emerged as an immediate hurdle, above which the pair could surpass 111.50 supply zone and aim towards reclaiming the 112.00 round figure mark.
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