USD/JPY holds weaker around mid-106.00s post-US data

   •  USD revives after US data matches/beats expectations but fails to lift the pair. 
   •  Weaker US bond yields offset risk-on mood and keeps exerting pressure.

The USD/JPY pair held on to its weaker tone through the early NA session and had a rather muted reaction to the US economic releases.

The pair struggled to gain any traction and hovered near the lower end of its daily trading range, despite slight better-than-expected US weekly jobless claims and PCE price index. 

This along with other US data, which were mostly in line with consensus estimates provided a minor boost to the US Dollar but failed to attract any strong buying interest around the major. 

Meanwhile, the ongoing retracement in the US Treasury bond yields seems to be the only factor tracked by bears and weighing on the major. 

However, the prevalent risk-on mood, as depicted by strong gains across European equity markets and which tends to weigh on the Japanese Yen's safe-haven appeal, extended some support and helped the pair to hold its neck around mid-106.00s. 

Today's US economic docket also features the release of Chicago PMI and Revised UoM Consumer Sentiment, which again would prove to be a non-event but might still be looked upon for some short-term trading impetus.

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes: “The pair is nearing its daily low of 106.39 with the ongoing slide seen as corrective as long as the mentioned level holds, given that in the 4 hours chart, the 200 SMA offers a short-term support around the level. Technical indicators in the mentioned time frame are retreating strongly from overbought readings, but remain well above their mid-lines, indicating that selling interest is limited. Below the next short-term support at 106.00, however, the risk of a bearish extension increases.”