USD/JPY rebounds to 109.50, USD stays offered

The greenback is now trading on a better mood, prompting USD/JPY to move to the mid-109.00s after dropping to the 109.20 region earlier in the session.

USD/JPY bid on USTs

Spot remains on the defensive so far this week, retreating for the second consecutive session amidst unabated geopolitical effervescence following recent news headlines citing the probability of another ICBM launch by North Korea anytime soon.

The pair dropped to the 109.20 region in early trade, although the dip was short-lived due to a rebound in yields of the key US 10-year reference, which are flirting with session tops just below the 2.15% mark.

Looking ahead, safe haven inflows should underpin the upside momentum around JPY as long as NK-led jitters prevail in the global markets, while the greenback should look to today’s factory orders results and upcoming Fedspeak (Brainard, Kaplan and Kashkari are due to speak) for direction.

USD/JPY levels to consider

As of writing the pair is losing 0.25% at 109.45 and a breakdown of 109.20 (low Sep.5) would expose 108.27 (low Aug.29) and finally 108.11 (low Apr.14). On the other hand, the immediate up barrier emerges at 110.42 (high Sep.1) seconded by 110.67 (high Aug.31) and then 110.95 (high Aug.16).