USD/JPY still under pressure near 110.80

The greenback has surrendered its initial gains vs. the Japanese Yen on Wednesday, prompting USD/JPY to deflate from the 111.20 area to the current 110.85/80 band.

USD/JPY upside capped near 111.30

Spot has retreated from daily tops in the 111.20 area along with the down move in US yields, where the 10-year benchmark is hovering over 2.22% after finding support near 2.20% earlier in the week. Yields in the US money markets, particularly the 10-year benchmark, stay as the main driver for the pair’s price action, all amidst a steady BoJ for the foreseeable furture and a potential rate hike by the Fed at next month’s meeting.

In the meantime, the pair is navigating the lower bound of the recent range in the 110.80/50 band, correcting lower after last week’s peaks just above the key barrier at 112.00 the figure.

In the data space, Japanese Housing Starts surprised to the upside, advancing 1.9% on a year to April, while preliminary figures expect the industrial production to expand at a monthly 4.0% during last month.

Back to the US, pending home sales and the Chicago PMI will precede de release of the Fed’s Beige Book.

USD/JPY levels to consider

As of writing the pair is up 0.01% at 110.84 and a breakout of 111.22 (high May 31) would open the door to 111.99 (38.2% Fibo of 108.11-114.39) and then 112.12 (high May 24). On the flip side, the next down barrier is located at 110.64 (low May 30) seconded by 110.51 (61.8% Fibo of 108.11-114.39) and finally 110.21 (low May 18).