USD/JPY: range bound around 113.00 on slow-day outlook

Currently, USD/JPY is trading at 112.87 with a high at 113.01 and low at 112.73.

With the US out on holidays today, USD/JPY is stuck within a narrow sideway range around the 113 handle while the dollar remains consolidated after attracting a bid last week and despite the yields falling back and stocks unable to maintain the momentum of continuous record highs last week. 

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USD/JPY has been giving back over 50% of last week's gains through the 113 handle and 114 handle en route to the 115.00 psychological level - although as stocks started to slow down, the yen picked dup the pace and took the baton for investors looking for a safer haven while trying to unravel the various news stories fro around the world. Datawise, Japan Trade balance came in for January in Yen terms as -1086.9bn vs. expected Yen -625.9bn.

USD/JPY levels

"The US dollar peaked against the Japanese yen in the middle of last week, just shy of JPY115, and the 50% retracement of the decline since reaching JPY118.60 at the start of the year," noted analysts at Brown Brothers Harriman.

Other key quotes:

"The JPY112.90-JPY113.30 band offers the immediate cap on the buck.  The JPY111.60 area is also important to support. It corresponds to a 38.2% of the dollar's recovery from last summer, and it is where a base was formed earlier this month."

"The technical indicators are not generating strong signals and, although the five-day moving average crossed above the 20-day at midweek for the first time since January 6, it has not been impulsive, of the risk of being whipsawed."