USD/JPY down to test 111.50, ignores broad USD demand

The USD/JPY pair remains better offered and now looks to extend the break lower towards 111.50 levels, as investors ignore resurgent US dollar demand across the board.

USD/JPY breaks below 200-DMA at 111.68

The spot failed to sustain at higher levels just below 112 handle and from there extends weakness, as the JPY bulls remain in command following the release of solid inflation figures released out of Japan earlier today.

Japanese inflation rises at a fastest pace since Apr 2015

The major also remains depressed amid tumbling Asian equities and subdued oil prices, which weigh down on the investors’ sentiment and therefore, boost the safe-haven flows in the yen.

Meanwhile, a renewed bout of buying seen around the US dollar against its major peers is largely ignored by markets, as somewhat less bullish comments from St. Louis Fed President Bullard keeps the prices in check.

Fed’s Bullard repeats view that Fed's expected rate hike path is overly aggressive

All eyes now remain on the key US macro data, including the durable goods and prelim GDP, due on the cards later in the NA session, as dust settles over the OPEC aftermath.

USD/JPY Technical levels                 

Jim Langlands at FX Charts noted: “The momentum indicators are mixed/neutral on Friday and another choppy range bound session within the 111/112 area would not surprise. While the dailies remain rather negative, the 4 hour charts may be hinting at a mild squeeze to the topside, and further short term gains could see another move towards 112.00/10 and then to 112.30, albeit possibly not today, and then to 112.75, which might be a decent sell area if we get there.”

“On the downside, below 111.45, there is little to prop the dollar up until 111.00, a break of which would lead to 110.85 and 110.60 ahead of last Thursday’s low of 110.23,” Jim added.