USD/JPY bounces off lows, around 109.70

After dropping to the 109.50 area, USD/JPY is now looking to gather some traction to the 109.65/70 band.

USD/JPY offered on safe haven buying

A bout of selling pressure around the greenback plus the continuation of the bid tone favouring the safe haven JPY following NK-led headlined have been weighing on the pair since Tuesday, dragging it just pips away from yesterday’s multi-week lows near 109.50.

In addition, spot is deriving extra weakness from the softer tone in the US money markets, where yields of the 10-year reference have dropped to fresh daily lows in the 2.25% area so far.

Lower-than-expected results from US producer prices in July plus below-estimates reading from the weekly initial claims are also putting the buck under extra downside pressure.

Later in the session, NY Fed W.Dudley (permanent voter, hawkish) is expected to speak, keeping the attention around the greenback.

USD/JPY levels to consider

As of writing the pair is retreating 0.38% at 109.66 facing the next support at 109.53 (low Aug.9) seconded by 109.01 (low Jun.7) and finally 108.81 (low Jun.14). On the other hand, a surpass of 110.35 (10-day sma) would open the door to 110.99 (23.6% Fibo of 108.81-114.51) and then 111.06 (high Aug.4).