USD/JPY finds support near 112.20

The greenback managed to regain some traction around the 112.20 area vs. the Japanese counterpart on Thursday, with USD/JPY now rebounding beyond 112.40.

USD/JPY rebounds on USTs

After bottoming out in the 112.20 region, spot met some dip-buyers along with a recovery in yields of the US 10-year benchmark, which gained around 2 bps since daily lows in the 2.32% neighbourhood.

USD opened the session on the defensive as market participants perceived as dovish yesterday’s FOMC minutes, where the Committee now sees drivers for low inflation as potentially non-transitory, while it gave no clues regarding the target for the balance sheet.

In the data space, Japanese tertiary industry activity index contracted 0.2% on a monthly basis. In the US calendar, initial claims and producer prices are next on tap, followed by speeches by FOMC’s permanent voter L.Brainard (mega-dovish) and J.Powell (centrist/dovish).

USD/JPY levels to consider

As of writing the pair is retreating 0.14% at 112.34 facing the immediate support at 112.08 (low Oct.12) seconded by 111.84 (200-day sma) and then 111.77 (61.8% Fibo of 114.51-107.33). On the other hand, a break above 112.63 (10-day sma) would pave the way for a test of 113.44 (high Oct.6) and finally 114.51 (high Jul.11).