USD/JPY has dropped 10 pips in early.....>

DOLLAR-YEN: USD/JPY has dropped 10 pips in early Asia-Pac trade and last sits at

Y111.18 after slumping 120 pips yesterday, as the yen was elevated by shrinking

risk appetite. Stocks registered losses across the board, with benchmark U.S.

indices touching new 2018 lows, but the Nikkei 225 is poised to open on the

front foot. 

- The BoJ left its policy rate unchanged yesterday, with the Board seeing

Japan's economy as moderately expanding despite certain headwinds.

- Japanese BoJ-targeted core CPI came in at 1.9% vs. exp. 2.0%, while regular

CPI fell in line with expectations. Muted reaction upon the release thus far. 

- Bears eye the 76.4% fibo retracement of the move from Y109.78 to

Y114.55/200-DMA at Y110.91/89 and a slip through these levels would open up the

1.0% 10-DMA envelope at Y110.67. Conversely, bulls need to jump back onto the

Y112.00 handle before attempting a move at Y112.46, which represents the cloud

base. 

- Japanese machine tool orders & all industry activity index are due later

today, while BoJ money flow report comes out in a couple of minutes.