USD/JPY finds buyers at 112.00, risk skewed to the downside

• The pair benefits from dollar's weakness and sour tone in European stocks
• USD/JPY technicals hints risk of further declines

USD/JPY continues to trade on a bearish mode, currently exchanging hands at 112.30 after finding support near at the psychological 112.00 round number. 

Sustained USD weakness weighs on USD/JPY

As Valeria Bednarik, Chief Analyst at FXStreet, notes: "There was no particular catalyst other than persistent dollar's weakness and the sour tone of European equities. The latest intraday recovery, was backed by US Treasury yields, which edged higher after a 5-day decline, although the pair's reaction is quite limited when considering that, for the 10-year note yields gained 7 basis points, to settle at 2.48%, while for the 30-year note, yields reached 2.82% from previous 2.74%, clearly indicating that bears remain in the driver's seat."

USD/JPY technicals remain bearish

Valeria adds: "The pair's 4 hours chart shows that it settled below its 100 and 200 SMAs, for the first time in over two weeks, and while technical indicators lost their downward momentum, they remain well below their mid-lines, with the RSI indicator in fact at 31, maintaining the risk towards the downside. Ever since December started, the pair bottomed around 112.00 multiple times, making of the level and immediate and relevant support, as if it gets broken, the bearish potential will likely increase."