USD/JPY - 105.87.. Dollar gains respite in relatively subdued Asian morning after yesterday's selloff from 106.77 (AUS) to as low as 105.66 in New York on active safe-haven yen buying due to inversion of U.S. yield curve as yields on 10-year U.S. Treasury notes dropped below the two-year yield for the first time since 2007, stoking investor's fears a recession will be forthcoming soon.
Although the decline from 106.97 (Tue) to 105.66 signals dlr's 1st leg of correction from Monday's 30-month trough at 105.06 has ended, near term o/sold condition should prevent steep fall, reckon 105.60-50 would contain weakness and bring rebound later today.
For now, bids are noted at 105.70-60 with stops below 105.50 whilst offers are tipped at 106.00/10 with stops touted above 106.30.
Apart from watching intra-day U.S. yields, pay attention to U.S. data dump later today starting with July retail sales, New York Fed mfg index, Philly Fed mfg survey, weekly jobless claims, labor cost, nonfarm productivity, industrial production, capacity utilization, mfg output, bus. inventories and NAHB market index.
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