Karen Jones, analyst at Commerzbank, suggests that USD/JPY's outlook is neutral to negative - it remains capped by the 2018-2020 downtrend at 109.52, but is showing a reluctance to sustain a break below the 107.89 November low, which has so far held on a closing basis.

"The low overnight was 107.65 and this guards the 106.48 October low and the 105.00 region. Initial resistance is the 55 day ma at 108.91/109.07 and we look for rallies to struggle here, the intraday Elliott wave counts are also indicating failure here. Only on a weekly chart close above the 2015- 2019 downtrend line and the December high at 109.72/110.27 (not favoured) would we question our bearish bias."