USD/JPY upside loses traction, deflates to 102.70/60

After hitting tops near 103.40 in earlier trade, USD/JPY is now returning to the 107.70/60 band.

USD/JPY attention to BoJ rumours, USD

The selling interest around the Japanese safe haven found extra support in response to news suggesting the BoJ could be mulling the idea of sending rates deeper into the negative territory instead of favouring further asset purchases at its meeting later in the month.

Spot is advancing for the second session in a row so far today, recovering ground lost on Monday and at the same time finding some decent support near the 101.00 handle.

The greenback, in the meantime, keeps looking to the Fed for direction, with bets increasingly divided regarding the likeliness of a rate hike at this month’s meeting.

USD/JPY levels to consider

As of writing the pair is advancing 0.10% at 102.68 facing the immediate resistance at 103.50 (50% Fibo of the July-August down move) ahead of 104.33 (high Sep.2) and finally 104.75 (100-day sma). On the other hand, a breach of 101.93 (20-day sma) would aim for 101.18 (low Sep.7) and then 99.53 (low Aug.16).