USD/JPY inching back closer to yearly lows

The USD/JPY pair stalled its modest recovery attempt near mid-108.00s and remains within striking distance of yearly lows, touched in the previous session.

A slight disappointment from today's final Japanese GDP growth figures for the second quarter helped the pair to bounce off lows. However, persistent greenback selling bias, with the key US Dollar Index languishing near YTD lows did little to provide any additional boost to the pair's recovery move. 

This coupled with weaker market sentiment, as depicted by losses around Asian equity markets and further reinforced by sliding US Treasury bond yields, underpinned the Japanese Yen's safe-haven appeal and was seen capping any meaningful recovery from the lowest level since November 2016. 

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In absence of any major market moving economic releases, the pair remains at the mercy of investors' risk appetite that would continue to be influenced by any fresh news coming out of the ongoing N. Korean crisis. 

Technical levels to watch

Bears would be eyeing for a decisive break through the 108.00 handle, below which the pair is likely to accelerate the fall towards 107.45 support en-route 106.85 horizontal support.

On the upside, sustained recovery above mid-108.00s could get extended towards 108.75 level before the pair eventually darts towards reclaiming the 109.00 handle.