USD/JPY keeps the red above 112.00

The greenback remains on the defensive vs. its Japanese counterpart on Wednesday, with USD/JPY struggling to gather some traction above the 112.00 handle.

USD/JPY finds support near 111.60

The pair is reverting yesterday’s gains, although it manages well to keep the trade above the 112.00 handle for the time being after finding quite decent support in weekly lows around 111.60.

US yields, particularly the well-correlated 10-year benchmark is losing ground for the third session in a row today and at the same trading in the area of 3-week lows in sub-2.40% levels, adding to the pair’s downside.

JPY remains somewhat supported by extreme positioning levels, as net shorts receded to multi-week lows in the week to January 31 according to the latest CFTC report. In the same line, scepticism over the ability of the BoJ to keep the 10-y yield around 0% stays on the rise, adding to JPY buying.

USD/JPY levels to consider

As of writing the pair is retreating 0.10% at 112.27 and a break below 112.04 (low Feb.8) would aim for 111.98 (38.2% Fibo of the November-December 2015 up move) and then 111.57 (low Feb.7). On the upside, the initial hurdle sits at 112.81 (high Feb.6) followed by 113.44 (high Feb.3) and finally 113.57 (20-day sma).