USD/JPY retreats in sync with Nikkei, T-yields, breaches 109.00

The USD/JPY pair took a sharp U-turn and fell back below 109 handle, after having faced strong selling pressure near 109.22 at Tokyo-open.

The spot trimmed recovery gains and now looks to extend its retreat towards the next support located at 5-DMA of 108.79, as risk-off moods seems to be back in vogue amid a retreat in the Japanese stocks and weaker commodities’ prices.

Moreover, the major also came under renewed selling pressure, after the treasury yields gradually turned negative across the curve, dragging the greenback lower against most of its major peers.

Next of note for the major remains the US housing data and industrial production numbers, which will be released later in the NA session.

USD/JPY Technical levels                 

A break above 108.46/68 (daily pivot/ 5-DMA) would expose 109 (zero figure) and 109.37/ 69 (1h 100-SMA/ 10-DMA). On the other hand, a breach of support at 108 (round number) could yield a test of 107.88 (Classic S2/ Fib S3) and 107.52/50 (Classic S3/ psychological levels).