USD/JPY tested 110.50 to the downside as Nikkei turns negative

The JPY bulls are back in action amid a turnaround in risk sentiment, as the Asian stocks turned negative in sync with the treasury yields, knocking-off USD/JPY to fresh session lows at 110.54, where it now wavers.

The recovery in the benchmark 10-year treasury yields from 5-week troughs lost steam, which partly collaborated to the retreat in USD/JPY from near 111 handle. Risk-off tone returns to markets as investors turn cautious ahead of the Trump-Xi Summit starting tomorrow, with all eyes on the talks about international trade and currency manipulation.

Moreover, the major also remains undermined amid expectations of the US private sector job numbers coming in softer last month, while the Fed minutes will also emerge a key driver for the prices in the day ahead.

USD/JPY Technical levels to watch             

The major finds immediate resistance at 110.99/111.03 (5 & 10-DMA). A break above the last, the major could test 111.50 (psychological levels) and 111.74/112 (20-DMA/ round figure) beyond the last. While to the downside, the immediate support is seen at 110.24 (4-day low) next at 110/109.92 (zero figure/Fib S3) and below that at 109.57 (200-DMA).