• Reviving safe-haven demand underpinned the JPY and exerts some pressure.
• The USD remains supported by Wednesday’s not so dovish July FOMC minutes.
• The downside seems limited ahead of the Fed Chair Powell’s speech on Friday.

The greenback lost some ground against its Japanese counterpart, dragging the USD/JPY pair back closer to the lower end of a four-day-old narrow trading range.
 
The pair continued with its struggle to make it through the 106.65-70 region - a resistance marked by 100-period EMA on the 4-hourly chart - and largely shrugged off a mildly positive tone surrounding the US Dollar, which remains supported by Wednesday's not so dovish FOMC meeting minutes.

Bears take cues from the prevalent cautious mood

The minutes echoed the Fed Chair Jerome Powell’s post-meeting message that the 25 bps rate cut was a mid-cycle adjustment and not the start of a lengthy easing cycle. Officials were united in wanting to signal that they were not on a preset path to more cuts and tempered expectations for an aggressive policy easing.
 
Bulls, however, seemed rather unimpressed and took cues from the prevalent cautious mood, which tends to underpin the Japanese Yen's perceived safe-haven status. Against the backdrop of prolonged US-China trade dispute, concerns over global economic growth seemed to weigh on investors' appetite for riskier assets.
 
Meanwhile, the downside is likely to remain limited as market participants are more likely to refrain from placing any aggressive bets and prefer to wait on the sidelines ahead of the Fed Chair Jerome Powell's scheduled speech on Friday at the Jackson Hole symposium. In the meantime, the broader market risk sentiment might continue to play a key role in influencing the pair's momentum amid absent relevant market-moving US economic releases on Thursday.

Technical levels to watch