The yen posted mix results across the board on Wednesday. Price action remain within recent range against the US dollar, favoring limited moves in other crosses. Also yields rose modestly and there was no economic data of relevance in the US, that could trigger volatility. On Thursday, jobless claims data will be released but not much impact is expected. The key day on data will be on Friday with the flash PMI of Japan and the US. Treasury Secretary Mnuchin will deliver a speech and it could gain attention if he, again, talks about the value of the US dollar or even if he delivers some details about the tax reform.
The USD/JPY pair is moving on a consolidation range below 109.30 and above 108.30. Ahead of the Asian session, the tone is starting to favor the downside and a decline below 108.60 would reinforce the bearish view. The pair needs to break the 108.30 in order to clear the way for a test of Monday’s lows and the 108.00 area. If the slide continues, the next target could be seen at 107.70. The recovery of the US dollar needs a confirmation on top of 109.30 in order to gain support for a bullish extension to 109.70. The dominant trend continues to favor the yen and only a break above 110.10 could change the bias.
Support levels: 108.70 108.35 108.10
Resistance levels: 108.70 109.30 109.70