USD/JPY weaker below 115.00 handle, eyeing Fed for fresh impetus

The USD/JPY pair came under some selling pressure and extended its retracement further below 115.00 mark to hit a fresh session low during early NA session.

Currently trading around 114.90 level, having posted a session low near 114.75 region, the disappointing release of US monthly retail sales data provide little bullish impetus for the already mildly weaker greenback. In fact, retail sales in the US registered a lower-than-expected growth of 0.1% during November, far less than October's 0.6% growth and short of 0.3% expected. 

Immediately after the release, the US Dollar turned lower across the board before rebounding quickly as higher-than-expected US PPI raised expectations of higher consumer inflation in the near-future. The producer-price index jumped 0.4% in November as against consensus expectations predicting a 0.2% increase. 

The pair, however, remained below 115.00 psychological mark as weaker sentiment surrounding equity market was seen driving flows towards the traditional safe-haven assets, like the Japanese Yen. 

Investors on Wednesday will remain focused on updated economic projections, which would determine the Fed's monetary policy stance in 2017 and eventually drive the pair in the near-term.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "given that in the 1 hour chart, the price is right below a bullish 100 SMA whilst technical indicators head south within bearish territory. In the 4 hours chart, technical readings also favor the downside, although the pair is extremely sensitive to US data, and can change course suddenly and reach fresh multi-month highs, on a hawkish FED."