USD/JPY finds support near 113.40

• Spot tumbles to 6-day lows near 113.40.
• Upside capped in the 114.70/75 band.
• US yields choppy around 2.31%.

The greenback remains on the defensive vs. its Japanese peer on Wednesday, relegating USD/JPY to the 113.40 region, or daily lows.

USD/JPY looks to US yields

The pair came under renewed selling pressure following the declining demand for the buck, as the rising uncertainty around the tax reform proposed by the White House has deteriorated the sentiment as of late.

In addition, the lack of a clear direction in yields of the US money markets leaves spot vulnerable, while yields of the 10-year reference are so far trading within a narrow 2.30%-2.32% range.

Nothing noteworthy in the US docket today, with only the EIA’s weekly report on crude oil inventories due for release ahead of Friday’s flash consumer sentiment gauge for the current month.

USD/JPY levels to consider

As of writing the pair is losing 0.38% at 113.57 and a break below 113.30 (21-day sma) would expose 112.98 (23.6% Fibo of 107.33-114.73) and then 111.74 (200-day sma). On the other hand, the next hurdle lines up at 114.73 (high Nov.6) seconded by 115.51 (high Mar.10) and finally 118.61 (2017 high Jan.3).