USD/JPY consolidating around 109 the figure, eyes on 107 handle

• USD/JPY: needs a break of 100-D SMA to the downside to open 55-D SMA.
• USD/JPY: lagging behind a pick-up in US10 year yields.

USD/JPY has been consolidating 20-40 pips either side of the 109 handle and is currently trading at 109.10, down -0.02% on the day, having posted a daily high at 109.41 and low at 108.76.

USD/JPY has decoupled from the US benchmark yield in current trade with the 10's moving higher in its day's rage of between 2.93-2.96 while USD/JPY drops to test 109 the figure in a series of lower lows on the short term charts while the DXY remains mid ranged between 92.4480-92.9740. The downside is technical with strong offers sighted at 109.35/40 in line with the 10-D SMA and daily Tenkan, (exporter territory).

US CPI to kick-start a breakout

USD/JPY is, however, a bit of a sideshow across the G10's on Monday with not a great deal happening out there with markets in holiday mode. Eyes are on USD/CHF and the euro where both are at their lowest levels vs the greenback since Nov and Dec respectively. Domestically, the Japanese were back to their screens on Monday but with no inclination to trade out of familiar tight ranges here in the aftermath of the nonfarm payrolls and with nothing new to take from the BoJ minutes, (some said it was too early to debate exit). Looking ahead, US CPI later in the week will be monitored and could come as a potential catalyst for a move out of recent ranges. 

USD/JPY levels

Analysts at Commerzbank noted that USD/JPY continued to ease back from back from the 61.8% retracement at 110.02. "This resistance is reinforced by the 200 day ma at 110.21. Dips lower have reached the short term uptrend which offers support. There is conflicting evidence but we are unable to rule out a slide to the 107.90 mid-February high and potentially the 107.11 55 day ma."