USD/JPY holds weaker near multi-week lows, below mid-112.00s
• Upbeat US housing data fails to provide any immediate respite.
• Traders ignore a goodish pickup in the US bond yields.
• Reviving safe-haven underpins JPY demand and prompting fresh selling.
The USD/JPY pair had a rather muted reaction to the US economic data and held weaker near 4-week lows touched earlier.
With investors looking past the latest US political jitters, today's better-than-expected housing starts and building permits data from the US provided some immediate respite for the US Dollar bulls.
• US: Building permits in October were at 1,297,000, 5.9% above September
Adding to this, a goodish pickup in the US Treasury bond yields helped the USD to recover majority of its early losses but failed to assist the pair to regain any positive traction.
Currently trading near the 112.50 region, the prevalent cautious sentiment around global equity markets, which tends to underpin the Japanese Yen's safe-haven appeal, seems to be only factor keeping a lid on any meaningful recovery for the major.
Against the backdrop of uncertainty over the fate of a major US tax reform legislation, a follow-through technical selling, following today's bearish break 50-day SMA, now seems a distinct possibility. Nevertheless, the pair remains on track to post a second consecutive week of declines.
Valeria Bednarik, American Chief Analyst at FXStreet writes: "From a technical point of view, the risk is towards the downside, as the pair develops further below its 100 and 200 SMAs in the 4 hours chart, with the shortest gaining bearish traction above the largest."
"The pair would need to recover beyond the 113.00 to shrug off the negative stance, yet only beyond 114.00 will turn actually bullish, quite unlikely for today" she added.