USDJPY: More weakness possible

1) As anticipated earlier, the USD/JPY pair followed the direction of the Nikkei 225 and opened with a significant gap lower today's trading session.

2) The pair retraced at the 61.8% Fib level which aligns with a major horizontal resistance level.

3) Futures positioning supports a stronger JPY vs USD

4) USD Index weakened today in the direction of US 2y, 5y, and 10y yields

5) Safe-haven flows could further support the JPY (Our risk sentiment index shows a reading of 3/10, everything below 5 is risk-off).