USD/JPY headed back to the 110 handle?

Currently, USD/JPY is trading at 109.85, up 0.11% on the day, having posted a daily high at 109.88 and low at 109.54.

USD/JPY has been drifting to the upside in a continuation of the recovery from the recently made fresh lows in the 1.08.20's on the back of yesterday's prolonged N.Korean/Japanese risk aversion. 

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The funding trade repatriation was short lived and the dollar caught a late NY session bid with a recovery in US yields and sentiment. Stocks picked up and the yen suffered across the board. 

"US 10yr treasury yields, which fell as far as 2.08% yesterday, which was the lowest since November, rebounded to2.14% (compared to 2.16% pre-missile news). 2yr yields rebounded from 1.30% to 1.32%," noted analysts at Westpac.

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USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that from a technical point of view, the 4 hours chart shows that the price remains below its 100 and 200 SMAs, while technical indicators have bounced sharply from nearly oversold readings and are currently pressuring their mid-lines, supporting further short-term gains ahead of a break above 109.70/80 region. "Further gains beyond 110.10, should open doors for a steeper advance towards 110.50," noted Valeria.