USD/JPY: Bulls losing ground as treasury yields retreat

The USD/JPY pair extended its retreat from multi-month peaks after a fresh selling wave gripped the US dollar amid retreat in the treasury yields.

USD/JPY awaits fresh impetus

The USD/JPY pair trims gains and now hovers near the mid-point of 113 handle, after having dipped to daily lows of 113.38. The renewed selling pressure behind the major can be partly attributed to a bout of profit-taking seen in the US dollar against its major peers, while a minor-correction in the treasury yields across the curve also dragged the spot lower.

However, the bulls quickly fought back control as the sentiment continues to remain buoyed amid an almost certain Dec Fed rate hike. The odds that the Fed will tighten at its December meeting are 100%, with the probability of additional moves by June climbing to 64% from 58% at the start of this week, Bloomberg reports.

Nothing of note for the major in the European session ahead, and therefore, all eyes remain on the US dataflow for fresh USD price-action.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 113.90 (multi-month high). A break above the last, the major could test 114.33 (daily R2) and 114.56 (March high) beyond the last. While to the downside, the immediate support is seen at 113.22 (daily low) next at 113.09 (daily pivot) and below that at 112.34 (Nov 24 low).

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