USD/JPY retreats from one-week tops, still comfortable above mid-107.00s

   •  USD rebound gains strong traction on surging US bond yields.
   •  Slide in the US equities fails to revive JPY’s safe-haven appeal.
   •  Today’s key focus would be on the latest FOMC meeting minutes.

The USD/JPY pair continued gaining traction for the fourth consecutive session on Tuesday and jumped to one-week tops, closer to the 108.00 handle. 

The pair extended its recovery move from last Friday's 15-month lows and was being supported by a strong US Dollar rebound, supported by a fresh wave of an upsurge in the US Treasury bond yields. Even a sharp overnight slide in US equities, which tends to benefit the Japanese Yen's safe-haven demand failed to stall the pair's ongoing bullish momentum. 

The pair touched an intraday high level 107.90 on Wednesday but has now retreated a bit as traders start repositioning for today's key event risk. The highly anticipated FOMC meeting minutes would be looked upon for clues about the central bank's monetary policy stances, interest rate trajectory, and outlook on inflation and economic growth, which would eventually provide some fresh directional impetus for the major.

Ahead of the important release, existing home sales data from the US might provide some short-term trading opportunities later during the early NA session. In the meantime, the USD price dynamics might continue to act as an exclusive driver of the pair's momentum.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet noted, “only a close above 108.50 would signal bullish trend reversal and open doors for a sustained rise to 110.00 and above.”

"A close below 107.28 (session low) would add credence to the downward sloping 10-day MA, 4-hour 50-MA and would allow a re-test of 106.00 - 105.55" he adds further.