USD/JPY - Offered above 109.00 despite uptick in T-yields

• USD/JPY offered above 109.00
• US 10-yr T-yield trades above 2.7 percent.

The technical recovery in the USD/JPY pair ran out of steam at 109.07 earlier today despite the rising Treasury yields and mixed Japanese data.

As of writing, the spot is trading at the session low of 108.80. The downward sloping 5-day MA seems to have played a spoilsport. Meanwhile, the 10-year treasury yield holds above 2.7 percent and is just short of the 3.5 year high of 2.727 percent set yesterday. Clearly, the hardening of the treasury yields is not helping the US dollar in Asia.

Also, better-than-expected Japanese retail sales data (actual 3.6% y/y vs. exp 2.2%) released earlier today may have helped boost demand for the Japanese Yen. The household spending 0.1% y/y in December vs. expected growth of 1.7%, but markets seem to have shrugged off the negative news.

Ahead in the day, the USD may find bids if the 10-year treasury yield rises above the previous day's high of 2.727 percent.

USD/JPY Technical Levels

FXStreet Chief Analyst Valeria Bednarik writes, "  The 4 hours chart shows that the advance has been so far corrective, with the potential of further gains limited at the time being, as despite the Momentum indicator entered in positive territory, is still at neutral levels, the RSI indicator has turned flat around 46, as the price continues developing far below bearish moving averages. The highs around 109.70/80 form a  resistance area that the pair needs to surpass to confirm a steeper recovery ahead.

Support levels: 108.70 108.25 107.90

Resistance levels: 109.35 109.75 110.10