USD/JPY looking to regain 112.00, USTs weaker

The Japanese yen is trading on a firm note on Friday, dragging USD/JPY to the area of 111.70, or session lows, albeit recovering some ground soon afterwards.

USD/JPY weaker on soft USTs, risk-off

Renewed threats from North Korea have sparked geopolitical jitters on Friday, at the same time lending support to the risk aversion sentiment and thus supporting fresh inflows to the safe haven Yen.

Adding to the correction lower, yields of the key US 10-year reference keeps losing ground following post-FOMC tops just below the 2.29% on Wednesday and are currently testing the area of daily lows in sub-2.25% levels.

In the data space today, Markit’s advanced manufacturing PMI for the month of September is only due, while the speeches by KC Fed E.George (2019 voter, hawkish) and Dallas Fed R.Kaplan (voter, hawkish) should keep the focus on the buck following the latest FOMC meeting.

USD/JPY levels to consider

As of writing the pair is losing 0.44% at 111.97 and a breakdown of 111.77 (61.8% Fibo of 114.51-107.32) would open the door to 111.10 (10-day sma) and finally 110.92 (50% Fibo of 114.51-107.32). On the flip side, the next hurdle aligns at 112.72 (high Sep.21) followed by 112.82 (76.4% Fibo of 114.51-107.32) and then 113.60 (high Jul.14).