The JPY bulls appear to tighten their grip once again in mid-Asia, sending USD/JPY back towards daily lows as the Japanese stocks extend to the downside.
USD/JPY faces double whammy
The dollar-yen pair witnessed fresh selling over the last hour, mainly driven by the extension of the losses in the Japanese equities, which triggered the demand for the safe-haven yen. At the time of writing, USD/JPY hovers within a striking distance of daily low posted previously at 112.40, recording a loss of 0.20% on the day.
Moreover, the ongoing weakness in the major can be also explained by the subdued trading activity seen around the US dollar across the board, as the bears consolidate the previous slide backed by dovish/ cautious remarks delivered by Fed Chair Yellen on Tuesday.
Meanwhile, the yen markets completely shrugged off a weaker Japan industrial output print, as the focus now remains on the US ADP jobs report due later today. Japan’s industrial production dropped the most since 2011, coming in at 6.2% m/m in February, as compared to a 5.8% decline forecast by markets.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 113 (round number/ 5-DMA). A break above the last, the major could test 113.29/45 (1h 50-SMA/ daily R1). While to the downside, the immediate support is seen at 112.12/00 (Mar 23 Low) and below that at 111.36/20 (Mar 22 & 21 Low).
(Market News Provided by FXstreet)