USD/JPY Support Eyed On Move Back Below Y110.00

The bid in the U.S. Tsy space/Wednesday's broader downtick in the USD allowed USD/JPY to move back below Y110.00, with spot last dealing ~10 pips softer on the day at Y109.85 into European hours, with longer dated U.S. Tsys continue to firm in Tokyo trade.

• The July 8 low/bear trigger (Y109.53) provides the next point of technical support, with any break there opening the June 7 low/key near-term support (Y109.19). Bulls need to force a break above the highs from July 14/7 (110.70/82) to reinstate their authority.
• The second day of Fed Chair Powell's semi-annual testimony on the Hill will likely dominate matters on Thursday.
• There is over $1.0bn of option expiries layered in between Y111.00 & Y111.15 at today's 10AM NY cut, although we would likely require a shift in U.S. Tsy dynamics for those expiries to become more relevant for price action.