USD/JPY sinks to fresh session low, below 112.50 support

The USD/JPY pair’s attempted recovery move ran through fresh offers near 112.95 area and the pair has now slipped below 112.50 support area. 

A fresh bout of weakness in European equity markets benefitted the perceived safety of the Japanese Yen. Moreover, persistent US Dollar selling pressure, after the Fed statement failed to provide any hint over the timing of next rate-hike move, has also collaborated to the pair’s sharp downslide on Thursday.

Meanwhile, nervousness over the US President Donald Trump's policies, especially after recent comments on exchange rates, is further refraining investors from lending any support to the greenback and halt the pair’s ongoing slide back towards two-month lows touched on Tuesday. 

In absence of any major market moving data from the US, investors will remain focused on Friday’s official jobs report (NFP) in order to determine the pair’s next leg of directional move. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet notes, "A daily close below the strong support of 112.50 would signal the sell-off from the recent high of 118.66 has resumed. Wednesday’s rejection at 5-DMA and 10-DMA coupled with the daily RSI’s repeated failure to move back above 50.00 points to heightened odds of a break below 112.50, in which case the spot could test 111.00 levels over the next few days. On the higher side, a daily close above 114.00 would expose January 27 high of 115.30."