The USDJPY currency pair remains slightly lower in price while reducing the gains it made earlier in the week.

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• USD/JPY clings to mild losses while paring week-start recovery.

The pair currently trades last at 146.007.

The previous day high was 146.4 while the previous day low was 145.15. The daily 38.2% Fib levels comes at 145.92, expected to provide support. Similarly, the daily 61.8% fib level is at 145.63, expected to provide support.

USD/JPY consolidates the week-start gains by printing mild losses around 146.00 heading into Tuesday’s European session. That said, the Yen pair justifies the market’s fears of the hawkish Bank of Japan (BoJ) monetary policy, as well as the downbeat sentiment.

An improvement in the late Japan growth and inflation numbers propel the 10-year and 30-year Japanese Government Bond (JGB) yields to the highest level since 2014, close to 0.66% and 1.66% respectively. With this, the top-tier bond coupons increase the market’s bets on the BoJ’s exit from the ultra-easy monetary policy, especially after the central bank’s latest tweak to the Yield Curve Control (YCC) policy.

On the other hand, the US 10-year Treasury bond yields refreshed the highest level since November 2007 earlier in the day to 4.36% before easing to 4.34% at the latest.

It’s worth noting that the mostly upbeat US data and looming fears about the US banking industry, especially after the recent credit rating downgrade from Moody’s and the S&P Global, underpin the market’s cautious mood and the bond coupons.

Furthermore, China’s efforts to defend the post-COVID economic recovery, via a slew of stimulus measures, fail to impress market optimists and exert downside pressure on the risk profile, which in turn allows the Yen (JPY) to cheer the traditional haven status.

Elsewhere, the Federal Reserve Bank of New York unveiled its SCE Labor Market Survey results late Monday that suggested record wage expectations and could have contributed to the latest risk-off mood, as well as firmer bond yields. “The Lowest wage respondents would be willing to accept for a new job jumped to a record high of $78,645 in July, up from $72.873 a year ago,” said the findings.

Amid these plays, Japan’s Nikkei 225 rises 0.80% but the S&P500 Futures print mild losses to reverse the previous recovery from the a nine-week low.

Moving on, US housing numbers, Japan inflation and the mid-tier policymakers’ speeches will be crucial for the USD/JPY traders. Above all, Friday’s Fed Chair Jerome Powell’s speech at the Jackson Symposium appears the key for clear directions.

USD/JPY stays on the bull’s radar unless providing a daily close beneath June’s peak of around 145.00.

Technical Levels: Supports and Resistances

USDJPY currently trading at 146.01 at the time of writing. Pair opened at 146.22 and is trading with a change of -0.14% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 143.47, 50 SMA 142.45, 100 SMA @ 139.32 and 200 SMA @ 136.56.

The previous day high was 146.4 while the previous day low was 145.15. The daily 38.2% Fib levels comes at 145.92, expected to provide support. Similarly, the daily 61.8% fib level is at 145.63, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 145.44, 144.67, 144.19
• Pivot resistance is noted at 146.7, 147.18, 147.96

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