USD/JPY drops back to session lows, around mid-110.00s

   •  A modest USD rebound losses steam.
   •  Risk-on lends some support.

The USD/JPY pair stalled its tepid recovery move near 110.80 area and has now retreated back to the lower end of its daily trading range. 

As the NA trading session got underway, a modest pullback in the US Treasury bond yields failed to provide any additional boost to a modest US Dollar rebound and prompted some fresh selling pressure around the major.

Further downside, however, seemed cushioned, at least for the time being, amid increasing investors' appetite for riskier assets, which tends to weigh on the Japanese Yen's safe-haven appeal. 

Moreover, investors might also refrain from initiating fresh bearish positions ahead of next week's BOJ monetary policy decision and might further contribute towards limiting any deeper losses. 

On the economic data front, the only scheduled release of Prelim UoM Consumer Sentiment is unlikely to provide any meaningful impetus, while speeches from various Fed officials could help traders grab some short-term opportunities.

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes, “technical readings keep favoring a new leg lower, as the Momentum indicator is entering bearish territory, the RSI indicator consolidates around 43, while the price remains well below is moving averages, with the 100 SMA gaining downward traction now around 111.90. The pair bottomed this week at 110.19, being the first short-term support ahead of a stronger one around 109.85. A weekly close below this last should open doors for a steeper and continued decline next week.”