USD/JPY: bears stay in control despite stock market reversal

• EUR/JPY: headed to a test of the 200-D SMA, weighing on USD/JPY.
• USD/JPY: will USD/JPY eventually turnaround on stocks bounce?

USD/JPY has been offered once again back below the 107 handle with recovery attempts in the US session capped by the ascending 100-he SMA at 107.01. USD/JPY Currently, USD/JPY is trading at 106.87, down -0.74% on the day, having posted a daily high at 107.79 and low at 106.64.

The yen had flourished in the woes of yesterday's stock markets. After the FOMC minutes that made the case for a faster pace of rate hikes, investors got out of Wall Street figuring higher rates are never a positive for borrowers and the benchmarks subsequently crashed. 

Bear stay in control

However, there has been a turn around in stocks today yet the bears have silenced the bulls and the DXY is just having one of those days, trodden down to a low of 89.63 while US yields have also been sent crashing down, with the 10-yr just above holding on to the 2.90's%. EUR/JPY has also been a factor at play, threatening an attack below the 200-D SMA, so far intact. 

USD/JPY levels

Analysts at Scotiabank run with the assessment that USD/JPY's short-term technicals remain bearish:

"USD/JPY softness below minor, short-term trend support over the past 24 hours suggests a moderation in the USD uptrend....  a break here targets 106.45/50. A low close today (potential “dark cloud cover” on the daily candle chart) adds to the soft technical undertone for this market."