USD/JPY: in a minor recovery, sustained in Tokyo on 109 handle, can it last?

Currently, USD/JPY is trading at 109.10, up 0.12% on the day, having posted a daily high at 109.22 and low at 108.87.

USD/JPY fell from 109.25 to 108.64 overnight and back to test a familiar support area with continued geopolitical concerns and continued concerns around the turnover of staff at the White House with the subsequent potential hold ups around any potential legislative requirements on key fiscal issues.

Subsequently, US 10yr treasury yields slipped from 2.20% to 2.17%, 2yr yields from 1.32% to 1.30%. Fed fund futures yields continued to price the chance of a December rate hike at around 40%

Dollar drifts lower ahead of Jackson Hole conference - ANZ

Meanwhile, Trump announced plans overnight to increase US military presence in Afghanistan contrary to his campaign pledge while the N.Korean situation took a temporary back seat. Markets await Trump's outline of the US strategy for Afghanistan in a TV address today, (US Monday 9 PM ET).

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet, explained that from a technical point of view, the 4 hours chart supports additional declines ahead, as the price remains well below bearish 100 and 200 SMAs. "Technical indicators hover within negative territory, although with limited bearish strength. Below 108.59, the low set last week, the pair has room to extend its decline down to 108.12, the mentioned yearly low."