USD/JPY off lows, still in the red around 108.00 mark

The USD/JPY pair trimmed a part of its early losses and has managed to recover around 30 pips from the Asian session swing low level of 107.66.

The pair failed to capitalize on the previous day's goodish intraday recovery move of around 120 pips from five-month lows and faced rejection near the very important 200-day SMA. The downtick lacked any obvious fundamental catalyst, rather attracted some dip-buying amid a further recovery in the global risk sentiment.

The downside seems cushioned

The recent worries over the coronavirus outbreak were partly offset by speculations of a coordinated interest rate cut by the top central banks. This eventually turned out to be one of the key factors that extended some support to investors' sentiment and weighed on the Japanese yen's perceived safe-haven status.

Reviving demand for riskier assets was evident from a positive mood around equity markets and reinforced by a strong rally in the US Treasury bond yields, which helped ease the recent bearish pressure surrounding the US dollar and further collaborated towards limiting the downside, at least for the time being.

It, however, remains to be seen if the pair is able to capitalize on the attempted recovery or continues with its recent downward trajectory. Investors await Tuesday's G7 conference call before positioning for the next leg of a directional move amid absent relevant market moving economic releases from the US.

Technical levels to watch