USD/JPY recedes to 115.70, tracks DXY, Nikkei lower

The USD/JPY pair failed to sustain the recovery above 116 handle post-China, and since then trims gains to now meander near session troughs of 115.67.

The pair is last seen exchanging hands at fresh four-day troughs of 115.74, having retreated from daily tops of 116.13, still up +0.33% on the day.  The major extends retreat from the early rebound as the US treasury yields turn negative, stalling broad based US dollar recovery.

Moreover, a set of mixed US data released yesterday also continue to hurt the sentiment around USD/JPY. While the ongoing declines in the Yuan against the US dollar spook markets and hence, boost the demand for yen as a safe-haven, capping the upmove in USD/JPY. Additionally, the Japanese stocks also keep losses amid risk-aversion, underpinning safe-haven flows for the yen.

Focus now remains on the US NFP report due on the cards later today, which is expected to set the tone for next direction in the spot. Markets are expecting the NFP figures to have remained steady around 175k last month. Besides, Fed Evan’s speech will also hog the limelight.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 116 (round figure/ daily pivot). A break above the last, the major could test 116.13 (daily high) and 116.73 (5-DMA) beyond the last. While to the downside, the immediate support is seen at 115 (zero figure) next at 114.56 (daily S1) and below that at 114.21 (50-DMA).