USD/JPY hits fresh session low, slips below 116.50 level

The USD/JPY pair remained under some selling pressure on Thursday and extended its slide further below 117.00 handle.

Currently trading around 116.40 region, testing fresh session lows, Thursday's release of moderately upbeat ‘Summary of Opinions’ from BoJ added on to Wednesday's disappointing release of the US pending home sales data have been the key catalyst behind Thursday's downslide. Moreover, a slump in the US Treasury bond yields is also collaborating to the selling pressure around the major. Adding to this, a fresh wave of weakness around Asian equity markets is further driving flows towards perceived safe-haven assets, like Japanese Yen, and driving the pair lower on Thursday. 

However, growing optimism over faster US economic growth and higher inflation might continue to underpin the greenback and restrict any sharp corrective slide in the near-term. Even from technical perspective, the current leg of weakness could be categorized as a corrective move, following its sharp up-surge to the highest level since February within a well-established strong up-trend.  

Traders now look forward to the usual release of initial jobless claims and goods trade balance data from the US, due later during NA session, in order to grab some short-term trading opportunities. 

Technical levels to watch

A follow through selling pressure below 116.50 support is likely to drag the pair towards 116.15-10 support area below which the pair is likely to extend the corrective slide further towards 115.40 horizontal support. On the upside, momentum back above 117.00 handle might now confront strong resistance near 117.50 region, which if cleared might assist the pair to make a fresh attempt towards reclaiming 118.00 handle.