•  Weaker US bond yields weigh on USD and prompt some fresh selling.
   •  Cautious mood underpins JPY’s safe-haven demand and adds to the bearish pressure.

After an initial uptick to 111.40 area, the USD/JPY pair met with some fresh supply and is now looking to extend the bearish momentum further below the 111.00 handle.

The pair drifted into negative territory for the sixth consecutive session and was being weighed down by some renewed US Dollar selling bias. A weaker tone around the US Treasury bond yields exerted some fresh downward pressure on the greenback and was seen as one of the key factors weighing on the major.

This coupled with the prevalent cautious mood around European equity markets, led by nervousness ahead of a key meeting between the US President Donald Trump and European Commission President Jean-Claude Juncker underpinned the Japanese Yen's safe-haven appeal and further collaborated to the downfall. 

In absence of any major market moving economic releases from the US, the USD/US bond yield dynamics and the broader market risk sentiment might continue to influence the pair's momentum. The key focus, however, would be on this week's important US macro data, especially the advance Q2 GDP growth figures, which might help in determining the pair's next leg of directional move. 

Technical levels to watch

The 110.75 area (2-week lows set on Monday) is likely to act as an immediate support, below which the pair is likely to head towards testing 110.30-25 horizontal support before eventually dropping to the key 110.00 psychological mark.

On the upside, the 111.35-40 region now seems to have emerged as an immediate hurdle, which if cleared might trigger a short-covering bounce and lift the pair beyond the 112.00 handle towards its next hurdle near the 112.25 level.