USD/JPY drops to lows near 111.60

USD/JPY met extra downside pressure on Wednesday despite the US docket surprised to the upside, currently testing lows near 111.60.

USD/JPY weaker on US yields

Spot retreated further following the knee-jerk in yields of the key US 10-year benchmark, dropping to fresh lows in the 2.26% area after briefly testing daily highs around 2.28%.

USD stays on the defensive vs. the Japanese safe haven today in spite of better-than-expected results from the US housing sector, where building permits rose 7.4% on a monthly basis in June and housing starts expanded 8.3% MoM to 1.254 and 1.215 million units, respectively.

In the meantime, the downbeat momentum is extending for the second week in a row and is currently prompting spot to meander around the 50% Fibo retracement of the June-July up move in the 111.60 zone.

In the data space, JPY should stay under pressure in light of the BoJ monetary policy meeting tomorrow, followed by the outlook report and trade balance figures.

USD/JPY levels to consider

As of writing the pair is retreating 0.37% at 111.67 and a break below 110.99 (61.8% Fibo of 108.81-114.51) would aim for 110.92 (low Jun.22) and then 110.16 (76.4% Fibo of 108.81-114.51). On the other hand, the next up barrier is located at 112.33 (38.2% Fibo of 108.81-114.51) seconded by 112.64 (21-day sma) and then 113.04 (10-day sma).