The USD/JPY pair reversed all of its early gains and has now retraced back below 104.00 handle after a powerful earthquake with a preliminary magnitude of 6.6 was reported to shaken western Japan.
The Japan Meteorological Agency reported that the earthquake struck at a depth of 10 kilometers in Japan's western and least-populated prefecture of Tottori.
Immediately after the news, stocks turned lower and the Japanese Yen strengthened on safe-haven demand, forcing the pair to touch a session low of 103.75. The agency, however, said that there was no threat of a tsunami from the quake and halted the slide in the major.
Currently trading around 103.85-90 region, the pair continued gaining traction during early Asian session and extended Thursday's up-move led by comments from Federal Reserve New York President William Dudley that the Fed will be able to raise interest rates and that he does expect an interest rate-hike later this year, which added to ECB-led strength for the US Dollar.
Technical levels to watch
On a sustained weakness below 103.75-70 immediate support, the pair is likely to head back towards 103.35 intermediate support before aiming towards retesting 100-day SMA support near 103.00 round figure mark.
On the upside, bullish momentum back above 104.00 handle, leading to a subseqent break above session high resistance near 104.20, is likely to lift the pair immedaitely towards 104.50-60 strong resistance area.
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