USD/JPY traders reluctant to make a move before US CPI?

• USD/JPY subdued in Tokyo open.
• USD/JPY GDP a miss but some positives.

USD/JPY has been subdued in the Tokyo open, with a little drift higher from 107.74 to 107.83 despite the Japanese  GDP data while markets instead await the US CPI later this week.  Currently, USD/JPY is trading at 107.82, up 0.03% on the day, having posted a daily high at 107.86 and low at 107.74.

Japan's (prelim) Q4 GDP arrived at 0.1% q/q (vs. expected at 0.2%) but was ignored despite the disappointment in the details of the data compared to expectations, although there have now been 8 consecutive quarters of economic growth.

USD/JPY price action

USD/JPY was offered yesterday, dropping hard from 108.80 in Asia and extending losses in European trade, making a low of 107.42 before a minor correction took place in NY towards the 108 handle, capped at 107.84. Markets are reluctant to take on risk ahead of this week's showdown in US CPI.  As for rates, the US 10yr treasury yields dropped to 2.83%, although the 2yr yields rose from 2.06% to 2.10%. The Fed fund futures yields have been steady once again, an according to a Bloomberg estimate, they are pricing the chance of another rate hike in March around 90%. 

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the pair bounced modestly overnight,  but remains technically bearish according to the 4 hours chart: 

"The price is further below its 100 and 200 SMAs, while indicators are barely bouncing from oversold readings. The immediate resistance is the previous weekly low at 108.04, while a critical support comes at 107.31, 2017 yearly low."