USD/JPY resumes the downside and challenges 115.00

• USD/JPY trades on the defensive near the 115.00 mark.
• US yields show a mixed performance on Wednesday.
• US headline CPI rose 7% YoY in December, in line with estimates.

The greenback accelerates its losses and drags USD/JPY to the area of weekly lows near the 115.00 figure on Wednesday.

USD/JPY looks to yields, weaker on data

USD/JPY resumes its monthly decline and quickly fades Tuesday’s uptick, refocusing once again on the lower end of the range in the 115.00 neighbourhood.

Mixed performance in the US cash markets show modest gains in yields in the short end of the curve, while the belly and the long end add to the recent decline and revisit the 1.70% area and the 2.05% zone, respectively.

In the docket, the selloff in the buck – and the downside in spot - gathered extra pace after US inflation figures measured by the headline CPI rose 7.0% in the year to December, matching forecasts and thus removing the surprise factor, which seems to have hurt the sentiment of many. The Core reading came above consensus after prices gained 5.4% vs. the same month in 2021.

USD/JPY levels to consider

As of writing the pair is losing 0.20% at 115.07 and faces the next support at 114.94 (2022 low Jan.3) seconded by 114.19 (55-day SMA) and then 113.14 (low Dec.17). On the upside, a surpass of 116.35 (2022 high Jan.4) would aim to 115.00 (round level) and finally 115.62 (high Jan.19 2017).