The break below the 100-hour MA (red line) earlier today hints at exhaustion by buyers amid the inability to firmly break above 111.50 and that means the near-term bias in the pair is now more neutral.
As such, this gives sellers more room to roam with the 110.00 level set to offer a key psychological support area in the sessions ahead.
For now, the typical risk trade is working again for USD/JPY as we see the yen side of the equation win out amid the risk-off mood in the market today.
US futures are down by 2% while bond yields are also weighed lower, and that is keeping the yen underpinned in the European morning.
All eyes are on the US weekly initial jobless claims report later to provide more clarity about the market sentiment as we begin to count down to the weekend.
For USD/JPY, buyers need to try and get back above the 100-hour MA @ 110.87 to re-establish a more bullish near-term bias.
Meanwhile, a drop back under 110.00 and towards the 200-hour MA (blue line) @ 109.39 will give sellers more of a chance to search for a deeper retracement lower in the pair.