USD/JPY recovered from the early Asian session low of 112.26 to trade marginally positive on the day around 112.60 levels.
The treasury yields are trading flat; hence the recovery in the Dollar-Yen could be attributed to anti-EU candidate Marine Le Pen’s loss in the French Presidential elections.
Focus on Fed speak
The light economic calendar is likely to be overshadowed by the Fed speak - New York Fed President William Dudley is set to speak in London, while Boston Fed President Eric Rosengren will speak in Indonesia. Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester are scheduled to speak as well.
The treasury yields could rise, leading to USD strength if the policymakers talk about the potential for four rate hikes in 2017 and/or reduction in the size of the balance sheet this year. It is worth noting that the reduction in the size of the balance sheet is likely to be seen as a quasi rate hike.
Other than the Fed speak, the pair remains at the mercy of the action in the stock markets.
USD/JPY Technical Levels
A break above 112.90 (5-DMA), above which the resistance at 113.10 (100-DMA) and 113.58 (50-DMA) could be put to test. On the other hand, a breakdown of support at 112.26 (session low) could yield a sell-off to 112.00 (zero figure) and possibly to 111.69 (Feb 28 low).
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