• USD/JPY remains off lows, facing resistance at 113.85.
• Quick rebound in US yields did not last, USD weakens again.

The USD/JPY rose from weekly lows at 113.37 to 113.83, reaching the highest level since the beginning of the European session but then quickly pulled back to the 113.65 area.

After the release of the Durable Goods Orders report, the USD/JPY bottomed at 113.37, the lowest level since October. A few minutes later, the decision of the Bank of Canada to end its QE program, boosted US yields and triggered a spike in USD/JPY to 113.83.

During the last hour, US yield turned again to the downside. The US 10-year yield is back at 1.56% after a brief rebound to 1.59%, down more than 3% for the day. The recovery in Treasuries is keeping the USD/JPY under pressure.

On Thursday, the Bank of Japan will have its monetary policy meeting and US economic data to be released includes Q3 GDP.

The immediate support in USD/JPY is seen around 113.40 area. A consolidation below would add more pressure targeting 113.20 and then 113.00/05. The US dollar needs to recover levels above 113.85 to alleviate the bearish pressure. Above the next resistance is located at 114.25.

Technical levels