USD/JPY bears remain in control on 111 handle after last week's slide in US yields

 Quarter end rebalancing and dovish Fedspeak saw US interest rates fall slightly, as explained by analysts at Westpac, noting that US 10yr treasury yields fell from 2.43% to 2.39% and USD/JPY fell from 112.20 to 111.25.

Market wrap: dollar closing near to week's high - Westpac

USD/JPY is continuing to fall back at the start of this week, extending the slide from the territory on the 112 handle and supply at 112.20 resistance. The yen was boosted just before the Tokyo open on the back of the quarterly The Tankan survey that demonstrated a positive story with regards to Japan's manufacturing industry. However, the overall picture is mixed and Japan's manufacturing PMI was a disappointment in March, coming in at 52.4 vs exp 52.6 and prev 53.3. Meanwhile, we had a mixed start from the equities in Tokyo following a choppy outcome in last months closing session in the US with the benchmarks consolidating their March reversal after making all-time highs at the start of the month. 

Weekend politics: Brexit getting personal, Trump about to wage war on N.Korea?

On a key week otherwise, with the FOMC minutes and nonfarm payrolls, Global developments are unfolding towards actualisation in many key risk areas for investors that could favor the yen in a risk-off environment. The weekend politics and this week's forthcoming meetings between Trump and Chinese President Xi Jinping could anchor the major until it is divulged that the meeting was a positive outcome in respect to global trade and geopolitical tensions elsewhere. 

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet, explained that the technical indicators have Momentum recovering and the RSI heading south, both within negative territory: "Shorter term, the 4 hours chart shows that the 100 and 200 SMAs keep heading south above the current level, whilst technical indicators have turned flat within neutral territory. Renewed selling pressure below 111.00, will likely favor additional declines towards the 110.10 level, last week low."