The pair extends losses as we enter European mid-day, sliding to a low of 112.12
Dollar weakness continues into the day, and despite US 10-year yields being up by 1 bps, there just appears to be no reprieve for the USD today.
But sellers should take note that there's a couple of strong support points for USD/JPY sitting nearby around the 112.00 area.
When you look at the hourly chart, support around the 112.00 area held on twice in December (6 Dec and 15 Dec) - whereby the 112.00 - 112.04 level seems to attract buyers.
However, the dollar weakness over the last week has been a whole other animal - and this could be a real test for the buyers to see if their resolve holds at the 112.00 region.
Adding to that, on the daily chart, 112.04 also coincides with the 100-day MA level which gives more conviction for it being a line in the sand.
Though, the broad dollar selling over the past week is really something else - and that kind of trend can be difficult to go against. I don't expect the dollar to weaken too much against the yen on the back of still diverging monetary policies (though yields are the key factor in driving the pair up), but in this kind of scenario, now's not the time to catch a falling knife.
