The Japanese currency continues to appreciate vs. its American peer this week, dragging USD/JPY to test daily lows in the 101.40 area in overnight trade.

USD/JPY weaker, keeps 2-week lows

Spot is retreating since Monday after being rejected from tops above the 104.00 handle, always against the backdrop of renewed selling pressure around the US dollar in response to disappointing data releases.

Expectations of a rate hike by the Fed as soon as this month continue to dwindle, weighing on USD sentiment, while the safe have JPY remains underpinned by swelling skepticism around the likeliness of further easing by the BoJ at its meeting later this month.

In this regard, BoJ’s Nakaso defended the looser monetary stance of the central bank, adding that further easing would be appropriate although he ruled out extra rate cuts into the negative territory.

USD/JPY levels to consider

As of writing the pair is retreating 0.05% at 101.70 facing the immediate support at 99.53 (low Aug.16) followed by 99.08 (low Jun.24). On the flip side, a surpass of 102.64 (55-day sma) would aim for 104.33 (high Sep.2) and finally 104.44 (38.2% Fibo of the July-August down move).