USD/JPY extends correction to lowest in a week near 113.60

• Yen among top performers on Thursday, recovers recent lost ground.
• USD/JPY down despite higher US bond yields.
• The rejection from above 114.00 suggests some upside exhaustion.

The USD/JPY is retreating on Thursday after hitting the highest level in years. Recently it dropped to 113.63, the lowest level in a week. The move lower took place even as US yields printed fresh monthly highs and amid a stronger dollar. The yen is among the top performers as US stocks trade mixed.

Economic data from the US showed Initial Jobless Claims dropped more than expected to the lowest since March 2020. On the negative front, the Philly Fed pulled back from 30.7 to 23.8, below expectations. Existing Home Sales rebounded more than expected. The greenback did not benefit from the numbers.

Rejection from above 114.00 points to some consolidation

If USD/JPY fails to rise back above 114.00 and post a weekly close below it would suggest some consolidation or even an extension of the current correction before the next move. After rising during four consecutive weeks and reaching a long–term barrier around 114.00, the rally could need to take a pause.

The initial support stands around 113.60 followed by 113.20 and then 112.10. A weekly close well above 114.00 should clear the way to more gains.

Technical levels