USD/JPY remains stuck in weekly range near mid-108s

• Concerns over a no-deal Brexit causes sentiment to turn sour.
• Upbeat macroeconomic data releases from the US supported the Greenback.
• US Dollar Index looks to close the day with modest gains near 97.50.

The USD/JPY continues to trade in its tight range a little above the 108.50 handle and struggles to find its next direction. In fact, since the start of the week, the pair has been fluctuating in a 50-pip range.

Although the Greenback started to gather strength on Thursday on the back of upbeat macroeconomic data releases from the United States, the dismal market mood didn't allow the pair to gain traction.

The data published by the IHS Markit showed that the economic activity in the manufacturing sector is expected to expand at a stronger pace in October than it did in September with the preliminary Purchasing Managers' Index (PMI) improving to 51.5 from 51.1. Supported by this PMI reading, the US Dollar Index advanced to its highest level in a week at 97.78 before going into a consolidation phase in the late American session. At the moment, the index is up 0.2% at 97.70.

Eyes on Brexit headlines

On the other hand, revived concerns over the United Kingdom crashing out of the European Union after British Prime Minister Boris Johnson called for a snap election on December 12 caused investors to flee to safer assets such as the JPY to keep the pair's upside limited.

The economic calendar on Friday won't be featuring any significant data releases and investors will remain focused on the EU's decision on the UK's request for an extension to Brexit and the risk perception is likely to continue to drive the pair's action.

Technical levels to watch for