USD/JPY slips below mid-107.00s, back closer to daily lows

• USD/JPY failed to capitalize on its early uptick to levels beyond 108.00 mark.
• The USD bid tone, improving risk sentiment might help limit deeper losses.

The USD/JPY pair surrendered a major part of its early gains to multi-day tops and is currently placed near the lower end of its daily trading range, around mid-107.00s.

The pair failed to capitalize on its early uptick to levels beyond the 108.00 round-figure mark and witnessed a modest intraday pullback, albeit a combination of factors helped limit any meaningful slide, at least for the time being.

The US dollar added to the previous session's strong gains and continued benefitting from its status as the global reserve currency amid concerns over the severity of the collapse in the economic activity due to the coronavirus-induced lockdowns.

This coupled with a modest recovery in the global risk sentiment, as depicted by a positive mood around the equity markets, undermined the Japanese yen's perceived safe-haven demand and extended some support to the major.

The pair had a rather muted reaction to the latest US economic releases, which showed that the number of individuals who filed for unemployment insurance for the first time came in at 5.25 million in the week ending April 11.

Separately, the Philly Fed Manufacturing Index slumped to -56.6 for April as compared to -12.7 previous, albeit did little to dampen the prevailing bullish sentiment surrounding the greenback or exert any meaningful pressure on the major.

It, however, remains to be seen if bulls continue to show some resilience at lower levels or prefer to wait for additional clues that the pandemic might be reaching its peak before positioning for any meaningful appreciating move.

Technical levels to watch