USD/JPY Still Below Y110.00

USD/JPY deals little changed at Y109.90, holding to a sub 15-pip range during Tokyo hours. The general bid in the U.S. Tsy space has allowed the cross to edge away from the cycle highs registered in early July, although there has been a lack of decisive movement in recent sessions.

• A reminder that the cheapening in U.S. Tsys (higher yields) that we saw during the second half of Tuesday's NY session facilitated some USD strength, allowing USD/JPY to move to best levels of the day, with a lack of meaningful follow through witnessed overnight.
• Initial support is located at the July 19 low (Y109.07), with any breach there opening the gate to the May 25 low (Y108.56) and nearby 76.4% retracement of the April 23-July 2 rally/May 7 low zone (Y108.47/34). To the upside, initial resistance is seen at the July 16 high (Y110.34), a break there would expose the July 14/July 7 highs (Y110.70/82)
• BoJ Deputy Governor Amamiya failed to add anything in the way of fresh meaningful insight in his latest address. Looking ahead to the remainder of Wednesday trade, participants will focus on the broader risk tone (as ever) in addition to U.S. fiscal developments.
• There isn't anything in the way of notable FX option expiries to be aware of over the coming days (at least not at present).