USD/JPY: Bears target 111.00, as risk-off outweighs dovish BOJ minutes

Amid ongoing UK political turmoil and oil sell-off, market sentiment remains sour, thus boosting the safe-haven flows in the yen.

USD/JPY: BOJ minutes ignored?

The USD/JPY pair extends its retreat from four-week highs for the second straight session, as the JPY bulls retain control amid sliding Asian equities, particularly the Japanese stocks, as oil-price weakness weighs heavily on the energy explorers. Japan’s benchmark index, the Nikkei 225 retreated from two-year highs to now trade sub-20,150 levels.

Moreover, a profit-taking slide after the recent upsurge cannot be ruled, as markets seek to take profits-off the table, in the wake of political uncertainty in the UK, after May’s deal with the DUP faltered.

Meanwhile, markets ignored dovish tone seen in the BOJ minutes, which showed that inflation is expected to remain weak going forward, and that the central bank will continue with its easy money policy until 2% price target is achieved.

In the day ahead, the spot will get influenced by the USD dynamics and persisting risk trends ahead of the US existing home sales data and US EIA crude inventory report.

USD/JPY Technical levels                 

According to Jim Langlands of FX Charts, the resistances are aligned at 111.78 (multi-week high), 111.90 (100-DMA) and 112.22 (61.8% of 114.36/108.80). Meanwhile, supports are located at 110.90 (23.6% of 108.80/111.59), 110.72 (Jun 19 low/ 200-DMA) and 110.64 (Jun 16 low).