USD/JPY holds weaker below 109.00 handle ahead of US jobless claims

The USD/JPY pair maintained its offered tone through mid-European session and is currently trading below the 109.00 handle.

Persistent greenback selling bias despite positive news of a three-month extension of the US debt ceiling, with the key US Dollar Index languishing near YTD lows below the 92.00 handle, has been one of the key factors weighing on the major.

This coupled with sliding US Treasury bond yield further added to already weaker sentiment surrounding the buck and further collaborated to the pair's fall to the 108.90-80 region.

Even the prevalent risk-on environment, as depicted by strong gains across  European equity markets and which tends to weigh on the Japanese Yen's safe-haven appeal, did little to lend any immediate support. 

Next on tap would be the release of weekly jobless claims data from the US, which is unlikely to provide any immediate respite for the USD bulls but would still be looked upon for some short-term trading impetus.

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Technical levels to watch

Bears would be eyeing for a follow through weakness through mid-108.00s, below which the pair is likely to extend the fall towards yearly lows support near the 108.15-10 region.

On the upside, any sustained recovery back above the 109.00 handle might continue to confront some fresh supply near the 109.20-25 region, above which a bout of short-covering could assist the pair to make a fresh attempt towards reclaiming the key 110.00 psychological mark.