The yen is slightly firmer across the board on the session as we are seeing markets adopt a more cautious tone still with US futures down by about 0.5% to 0.8% at the moment, with 10-year Treasury yields also lower by 1.6 bps to 0.669%.
European equities are still keeping higher but have seen gains trimmed from opening levels to start the day earlier. The DAX is now up by 0.6% as we near mid-morning trade.
In general, this is pretty much a noisy session so far. We're seeing light movements but they're not really amounting to much general change in trading sentiment.
US futures point to more cautious tones but they aren't seen pushing the boundaries of key technical levels just yet, with E-minis still pointing to the S&P 500 keeping just above its 200-day moving average for the time being at least.
Back to USD/JPY, this is pretty much a "dead" pair in my view. And it is all because of the false breakout in Treasury yields that we saw at the start of the month.
The fact that we're seeing yields fall back into its April to May range pretty much signifies that USD/JPY is also back to more rangebound trading currently.
Both currencies are mostly reacting to the same fundamental factors and unless Treasury yields help to give out stronger hints to lean on either one currency, there is nothing to really push the pair from breaking this consolidation phase in and around 107.00.
Downside remains limited closer to 106.00 while upside is also limited closer to 108.00.
As such, one can try to read into the near-term technical movements in USD/JPY but I'd try to stay away from it because it isn't really indicative of much for the time being.