USD/JPY: Upside stalls near 111.50 as T-yields retreat

The overnight rally in USD/JPY lost legs just below the mid-point of 111.50, now pushing the rate lower to test 10-DMA support located at 111.24.

The bid tone around the USD/JPY weakened in Asia after the US dollar stalled its recovery mode versus most of its majors, with the DXY having run into key resistance at 100 mark, as treasury yields retreat.

More so, negative performance seen on the Japanese stocks fuels safe-haven flow into the yen, thereby, capping the upside in the major.

Meanwhile, the Japanese currency remains unperturbed by the dovish remarks from the BOJ deputy governor Iwata, citing that it’s appropriate to continue powerful monetary easing until 2% price target is achieved.

Markets now look forward to the US growth figures due later in the NA session for fresh impetus on the greenback. Preliminary GDP, which preceded Final GDP, posted a gain of 1.9% in Q1, although missed estimates. The final GDP for Q1 is expected to come in at 2.0%.

USD/JPY Technical levels to watch             

The major finds immediate resistance at 111.43/50 (daily top/ psychological levels). A break above the last, the major could test 111.99/112 (classic R3/ round figure) and 112.65 (20-DMA) beyond the last. While to the downside, the immediate support is seen at 110.93/111 (5-DMA/ daily pivot) next at 110.69/50 (Mar 30 low/ psychological levels) and below that at 110.38 (Fib S3/ classic S2).