USD/JPY recovers lost ground, flirting with session tops near 110.80

The USD/JPY pair has managed to recover early lost ground to session low near 110.30 region and is now navigating around the 110.80-75 region, or session tops. 

Spot regained some traction during mid-European session despite of the prevalent risk-off sentiment, as depicted by negative mood surrounding European equity markets, which tends to boost the Japanese Yen's safe-haven appeal. A modest recovery in the US treasury bond yields, helping the key US Dollar Index to recover from lows touched in the aftermath of FOMC minutes, seems to be a key factor for the pair's recovery from session low.

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The greenback recovery, however, lacked momentum and the index remained below a three-week high level of 100.99 touched on Wednesday after impressive ADP report on the US private sector employment. 

Adding to this, cautious environment ahead of the meeting between the US President Donald Trump and his Chinese counterpart Xi Jinping, starting Thursday, might also collaborate towards keeping a lid on additional recovery gains for the major.

On the economic data front, the US weekly jobless claims data might provide some impetus for short-term traders during early NA session.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes, "Pair’s retreat from the high of 111.50 post Fed minutes release led to a symmetrical triangle set up on the 4-hour chart. The spot is finding support at the floor (110.30) of the symmetrical triangle. However, sell-off is seen gathering pace only below 110.00 levels. Friday’s close below the falling channel floor would signal continuation of the retreat from the December high of 118.66 levels."