USD/JPY meets fresh supply, back below 113.50
|- DXY extends post-NFP sell-off
- The Yen underpinned by strong manufacturing index.
- Focus shifts to the US CPI, Fed outcome.
The US dollar extends its Asian retreat against its Japanese counterpart into early Europe, now on the offers back below the midpoint of 113 handle.
USD/JPY off 3-week tops
The spot is seen closely moving in sync with the US dollar index, as subdued Treasury yields across curve continue to undermine the sentiment around the buck. Mixed US labor market report released on Friday weighs down on the US rates, while markets also resort to profit-taking on their USD longs after the recent upsurge heading towards the FOMC decision due later on Thursday.
More so, stronger Japanese BSI manufacturing index released earlier in Asia also lends support to the renewed uptick seen in the Yen, pushing USD/JPY further southwards. Japan big manufacturers' mood improves in October-December: Govt survey
Looking ahead, the pair will take cues from the sentiment on the European open ahead of the US JOLTS jobs opening data, as investors brace for the US inflation report and Fed outcome due later in the week ahead.
USD/JPY Technical View
Jim Langlands at FX Charts, noted: “With the momentum indicators aligning higher, a test of 113.80 would not surprise, beyond which 114.00/05 will see sellers ahead of a possible towards 114.30 and even 114.75. Look to buy dips towards 113.00/10 with a SL placed sub 112.80.”
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