USD/JPY: testing a critical support area, July 2016 high at 107.49 on the map?

Currently, USD/JPY is trading at 108.71, down -0.43% on the day, having posted a daily high at 109.44 and low at 108.64.

weighed by further Nikkei decline overnight and a soggy performance on Wall Street and lower US yields (-0.63%) today, USD/JPY is testing a strong level of support here we saw the low of 108.60 on the 18th. 

These are the lowest levels since April earlier this year. USD/JPY has been pressured by the conflicts in Washington and rising tensions around N.Korea once again that bring in the potential for a run off to the early April lows around 108.30.  Meanwhile, the focus for the week is the Jackson Hole Symposium and Yellen’s speech on Friday.  Durable goods orders (Friday) will also be keenly watched. Analysts at Scotiabank explained that the broader tone remains crucial for JPY as market participants remain attentive to ongoing geopolitical risk.

Balance of risk appears to favor near-term JPY strength - Scotiabank

USD/JPY levels

Analysts at Commerzbank argued that the cross is still expected to level out ahead of the April low at 108.13. "While it holds another attempt at breaking above the 111.05 current August high could still be made. Failure at the 108.13 April low would put the July 2016 high at 107.49 on the map."