The Japanese Yen is extending its gains vs. the greenback at the beginning of the week, with USD/JPY now under pressure in the 112.30 area amidst thin trade due to the Ocean Day holiday in Japan.
USD/JPY weaker on US yields
Spot is under further downside pressure following the poor performance of yields in the US money markets, where the 10-year benchmark is hovering around the 2.31% level, down from nearly 2.40% seen during last week.
Miserable prints from US CPI and retail sales during June published on Friday put the buck under extra selling pressure today, while market participants keep adjusting to the potential prospects of a more gradual tightening cycle by the Federal Reserve during H2.
The view of a slower rate hike path is a vision shared by FOMC governors L.Brainard and C.Evans, as per recent comments.
USD/JPY levels to consider
As of writing the pair is retreating 0.16% at 112.36 and a break below 112.24 (low Jul.14) followed by 111.95 (55-day sma) and finally 111.81 (200-day sma). On the other hand, the next up barrier is located at 113.16 (23.6% Fibo of 108.81-114.51) seconded by 113.30 (10-day sma) and then 114.51 (high Jul.11).
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