USD/JPY turns negative, deflates to 107.40

The Japanese yen has reclaimed part of the ground lost to its American peer today, sending USD/JPY to test the 107.40 area.

USD/JPY upside limited around 108.0

Spot keeps trading in a choppy fashion during the firs half of the week, today fading part of yesterday’s advance against the backdrop of generalized selling bias around the US dollar.

The greenback keeps suffering as investors continue to unwind USD-positions on decreasing expectations of a rate hike by the Fed at some point during the summer.

Releases in the US docket showed Non-farm Productivity contracting 0.6% QoQ in Q1, while Unit Labor Costs rose 4.5% during the same period. Adding to USD-blues, IBD/TIPP’s Business Optimism index has come in at 49.4 in May vs. 51.5 expected.

USD/JPY levels to watch

As of writing the pair is losing 0.25% at 107.28 facing the immediate support at 106.38 (low Jun.6) ahead of 105.52 (2016 low May 3) and then 105.18 (low Oct.15 2015). On the other hand, a surpass of 107.91 (high Jun.7) would target 109.21 (20-day sma) en route to 109.50 (55-day sma).