USD/JPY bounces off lows, retakes 110.00 mark

   •  USD remains heavily offered across the board. 
   •  Subdued US bond yields fail to lend support.
   •  A minor short-covering bounce visible below 110.00 mark.

The greenback continued losing ground against its Japanese counterpart, with the USD/JPY pair hitting fresh multi-month lows during the Asian session on Wednesday.

The pair extended its post-BOJ sharp retracement slide from levels beyond the 111.00 handle and momentarily dipped below the key 110.00 psychological mark, for the first time since mid-September. 

With investors looking past a congressional vote to end a three-day government shutdown and now so hawkish BOJ, persistent US Dollar selling pressure was seen as one of the key factors exerting continuous downward pressure on the major.

Meanwhile, a subdued tone around the US Treasury bond yields did little to ease the prevalent strong USD bearish sentiment, with near-term oversold conditions prompting some short-covering from sub-110.00 levels.

Today's US economic docket, featuring flash PMI and existing home sales data, might provide some short-term trading impetus ahead of this week's other important US macro releases.

Technical outlook

Currently placed around the 110.05-10 region, any subsequent recovery attempt is likely to confront resistance near 110.25-30 zone, above which a bout of short-covering could lift the pair back towards 110.55-60 hurdle.

On the downside, weakness back below the 110.00 handle, leading to a subsequent break below 109.80 level (session low) has the potential to continue dragging the pair further towards its next support near 109.55 area.