USD/JPY struggles near 108.00 handle, weekly lows

The USD/JPY pair dropped to fresh weekly lows during the Asian session on Thursday, albeit now seems to have stabilized around the 108.00 handle.

The pair remained under some heavy selling pressure for the second consecutive session on Thursday and extended the overnight sharp pullback from six-week tops, triggered by the Fed Chair Jerome Powell's dovish sounding remarks in the prepared statement for the semi-annual Congressional testimony. 

Powell said that uncertainties continue to dim the outlook and also highlighted the risk that weak inflation will be persistent. Adding to this, the June FOMC meeting minutes revealed that many policymakers judged additional monetary stimulus would be needed soon and revived hopes for an aggressive rate cut.

This was evident from a fresh leg of a sharp downfall in the US Treasury bond yields, which continued undermining the US Dollar demand and kept exerting pressure on the major, though positive equities weighed on the Japanese Yen's safe-haven status and helped limit the downside, at least for the time being. 

Moving ahead, Thursday important release of the latest US consumer inflation figures for June, followed by the second day of Powell's testimony will now be looked upon to grab some meaningful trading opportunities later during the North-American session. 

Technical levels to watch