USD/JPY off-six-day highs, flirts with 103 handle

The bulls faced exhaustion at higher levels, sending the USD/JPY pair back below 103 handle, as markets mull over speculation surrounding BOJ’s next move.

USD/JPY back to test 102.50?

The USD/JPY pair is seen reversing an uptick to 103.20 levels after the yen dropped amid news that the BOJ is likely to move rates further in the negative territory next week. While reports that the BOJ is seen trimming purchases of long-term Japanese government bonds sent the Japanese as well as global yields soaring, thus, reinforcing the rally in the major.

However, over the last hour, the dollar-yen pair ran through fresh offers and slipped below 103 handle, despite a recovery in the US treasury yields, as uncertainty over global central banks’ policy action continue to weigh on the investors’ sentiment somewhat. At the time of writing, USD/JPY advances +0.36% to 102.96, recovering from a dip to 102.88 session lows.

All eyes remain on the movement in yields across the globe and RO-RO trends in order to gauge further moves in the major. While the upcoming US retail sales and CPI data remain the main risk events for this week.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 103.20 (six-day high). A break above the last, the major could test 103.61 (daily R2). While to the downside, the immediate support is seen at 102.52/50 (50 & 5-DMA) and below that at 102.33 (20-DMA).