The pair is trading rather flat today as markets are still sorting out their feet on the week. Softer inflation figures in Europe yesterday weighed on bond yields initially but that switched up when we got to US trading, with Treasury yields rising instead. That helped USD/JPY to avert another close below daily support around the region of 137.65 to 138.45:
That region remains the key support area to watch for the pair currently. Hold above and buyers are still in the game but break below and we are likely to see a further run to the downside towards 135.00 next.
Month-end flows are arguably making it hard to read into the action so far this week but the technicals are still your best bet in deciphering what might come next for the pair.
For now, buyers are hanging on in there but they have much work to do themselves. Pushing back above the 200-hour moving average at 139.72 will be a good first step but more crucially will be the need to break back above the 100-day moving average (red line), now at 141.21, to really convince of a turnaround in trading sentiment.