USD/JPY bounces off lows, back above 112.00

The greenback stays on a bid tone vs. its Japanese counterpart at the beginning of the week, with USD/JPY coming down to test lows just below the 112.00 handle although managing to rebound since then.

USD/JPY focus on Fedspeak

The pair is recovering the ground lost on Friday, rebounding from the 111.60 region to levels above 112.50 seen during early trade on Monday.

A better mood in the risk-associated space following the lack of news from the Korean peninsula is collaborating with the outflows from the safe haven JPY and lending extra legs to the spot.

The current bounce in USD/JPY is in tandem with the pick up the pace of US 10-year yields, navigating the 2.24% area after finding support in the 2.23% neighbourhood.

Furthermore, the speculative community trimmed its JPY speculative net short positions to the lowest level since June 20 in the week to September 19, as per the latest CFTC report.

Data wise today, the Chicago Fed index is only expected in the US docket, followed by speeches by NY Fed W.Dudley (permanent voter, dovish) and Chicago Fed C.Evans (voter, dovish).

USD/JPY levels to consider

As of writing the pair is gaining 0.16% at 112.17 and a breakout of 112.72 (high Sep.21) would open the door to 112.82 (76.4% Fibo of 114.51-107.32) and finally 113.60 (high Jul.14). On the other hand, the immediate support emerges at 111.77 (61.8% Fibo of 114.51-107.32) seconded by 111.37 (10-day sma) and then 111.12 (100-day sma).