USD/JPY recovery extends to the 107.35/40 band

• The pair continues to pare losses after bottoming out near 107.10.
• Yields of the US 10-year reference bouncing off 2.92%.
• Fedspeak and Japanese inflation figures (Friday) in the limelight.

After bottoming out in the boundaries of 107.10, USD/JPY met some buying interest and is now managing to retake the 107.35/40 band.

USD/JPY looks to yields, CPI

The pair is retreating for the first time after four consecutive daily pullbacks on Thursday, apparently in line with the retracement of yields in the US 10-year reference from Wednesday’s multi-year peaks in the 2.96% neighbourhood.

The increasing risk-off trade seen in the wake of the publication of the FOMC minutes has given renewed oxygen to the safe haven JPY, dragging spot lower on prospects of further tightening by the Federal Reserve via rate hikes.

Looking ahead, Fedspeakers will keep the attention around the buck while inflation figures for the month of February will be the salient event tomorrow in the Japanese economy.

USD/JPY levels to consider

As of writing the pair is down 0.39% at 107.35 and a breakdown of 105.53 (2018 low Feb.16) would open the door to 102.54 (low Nov.3 2016) and finally 101.15 (low Nov.9 2016). On the upside, the initial hurdle is located at 107.92 (high Feb.21) seconded by 108.34 (21-day sma) and then 110.48 (high Feb.2).