USD/JPY drops back to 112.00, as Treasury yields stall rebound

The USD/JPY pair ran into stiff resistance located near 112.20 levels once again, now pushing the rate back in the red zone near 112 handle.

The latest leg lower in the spot can be mainly attributed to renewed weakness in Treasury yields, as the ongoing rebound faltered amid cautious sentiment prevalent across the financial markets.

Investors fear increasing uncertainty over the Trump administration, especially after the Trump Health care plan debacle, while increased nervousness ahead of the ECB and BOJ monetary policy decisions due later this week, also keeps buoyant tone around safe-haven Yen intact.

In the meantime, the pair will get influenced by the US housing starts and building permits data slated for release later in the NA session.

USD/JPY Technical levels                 

A break below 111.88 (daily low) would open doors for 111.69 (multi-week lows). A break lower would yield a test of 111.50/43 (psychological levels/ 100-DMA). To the top, a daily close above 5-DMA at 112.31 would shift risk in favor of a re-test of 112.92/99 levels (20 & 10-DMA).