USD/JPY holds below 112.50, stable Tankan prints

USD/JPY is trading in a comatose fashion during the first hour of trading in Tokyo, with the rate exchanging hands around 112.35 following a second day of losses on the back of a resumption in the US curve, which keeps flattening. 

In today's Bank of Japan survey of firms (Tankan series), which is conducted 4 times a year, some improvements were noted, especially from the small firms, while large manufacturing enterprises saw rather flat readings. The data, overall, should be seen as a positive input for the BoJ to be more constructive in the decreasing need of stimulus as the economic activity continues to remain solid. 

USD/JPY technicals

Valeria Bednarik, Chief Analyst at FXStreet, wrote: "The pair heads into the Asian opening near its daily low, biased lower according to intraday technical readings. In the 4 hours chart, the price has broken below its 100 SMA that anyway remains horizontal, after being capped by an also directionless 200 SMA, while technical indicators accelerated south, now nearing oversold readings."

Jim Langlands, Founder at FXCharts, notes: "While the daily charts remain neutral the short term momentum indicators look heavy on Friday and further downside momentum could now take the dollar back to the recent low of 111.97, below which could give the strong support at 111.75 a nudge. I am neutral today although a minor test of the downside would not surprise."