USD/JPY stalls corrective-slide, re-takes 112 amid higher T-yields

Despite persistent weakness seen in the US dollar across the board, the bulls manage to find some support from ongoing strength in Treasury yields, sending the USD/JPY pair back to 112 handle.

USD/JPY fails once again near six-week tops

The spot is seen trimming losses, although remains deep in the red zone, as demand for the safe-haven Yen remains at full steam amid risk-off trades, with the European equities joining the global sell-off, triggered the US Healthcare vote deal.

Over the last hour, the recovery in USD/JPY gained traction as Treasury yields stage a solid rally, especially with the benchmark 10-year Treasury yields hitting fresh four-week highs of 2.242%, up nearly +1.50% on the day.

Attention now turns towards the ECB Symposium, where the Fed Chair Yellen and BOJ Governor Kuroda are due to participate in a panel discussion, with markets eagerly awaiting their respective take on the monetary policy program, which will bring monetary policy divergence back to the fore.

Also, of note for the major remains the US goods trade balance and pending home sales data slated for release in the US session.

USD/JPY Technical levels                 

According to Slobodan Drvenica at Windsor Brokers Ltd, “Consolidation below Tuesday's fresh nearly six-weeks high at 112.46 is so far holding above 112.00 handle, keeping intact more significant daily cloud (currently spanned between 111.82/65 and reinforced by 100SMA) which should ideally contain dips ahead of fresh push higher, as bulls eye target at 113.05 (Fibo 76.4% of 114.36/108.80). Res: 112.24; 112.46; 113.05; 113.35 Sup: 112.00; 111.82; 111.65; 111.46.”