The technical recovery in the Dollar-Yen pair fell apart at 111.00 levels as the Bank of Japan (BOJ) trimmed QE purchases. The spot fell back to 110.81 levels and was last seen trading around 110.90 levels.
Session lows unchallenged
The intraday low of 110.77 remains intact despite the BOJ news, suggesting the bears could be facing exhaustion following the recent sell-off from the high of 114.49.
Fresh intraday lows have also been avoided due to data showing the decline in the Japanese manufacturing growth to eight-month low.
Ahead in the day, the focus will be on the broader market sentiment. S&P 500 futures are down 0.15%, while major European index futures - DAX and FTSE 100 are down 0.20% and 0.14%, respectively. The losses in the equity markets would keep the Japanese Yen well bid.
USD/JPY Technical Levels
The 1-hour RSI is oversold. A break above 111.05 (1-hr 10-MA) would open up upside towards 111.59 (5-DMA) and 111.68 (100-DMA). On the other hand, a breakdown of support at 110.77 (intraday low) would expose 110.23 (May 18 low) and 110.00 levels.
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