USD/JPY bounces off 108.90, US CPI on sight

After a brief test of lows in sub-109.00 levels, USD/JPY seems to have found dip buyers and has now regained the 109.00 neighbourhood ahead of key US data.

USD/JPY focus on US CPI

Spot has intensified its weekly decline to levels last seen in mid-June around 108.90, just pips away from June’s lows and lower end of the prevailing range in 108.81.

The demand for the safe haven JPY, led by escalating concerns over the NK-US effervescence, keeps sustaining the move lower in the pair, which is retreating for the fourth consecutive session and closing in red figures in four out of the last five weeks after recording tops in the mid-114.00s seen in July.

In addition, yields of the key US 10-year reference – crucial driver for the pair - are trading in sub-2.20% levels, or multi-week lows.

Looking ahead, US inflation figures tracked by the CPI are due later ahead of speeches by Dallas Fed R.Kaplan (voter, hawkish) and Minneapolis Fed N.Kashkari (voter, dovish).

USD/JPY levels to consider

As of writing the pair is retreating 0.12% at 109.06 facing the next support at 108.91 (low Aug.11) seconded by 108.81 (low Jun.14) and finally 108.11 (2017 low Apr.14). On the other hand, a surpass of 110.15 (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).