USD/JPY flat around 108.80, ADP eyed

• Spot retreated from highs above 109.00.
• US yields bounces off lows, retake 2.70%.
• US ADP, FOMC in the limelight.

After testing fresh highs above the 109.00 handle during early trade, USD/JPY has now finds itself meandering in the middle of the daily range in the 108.80 area.

USD/JPY focused on US docket

The pair keeps the erratic performance so far this week, navigating the lower end of the recent range and close to 4-month lows in the mid-108.00s, always against the backdrop of a persistent selling bias around the buck.

Another confirmation of the accommodative path by the BoJ passed almost unnoticed for JPY-traders, which continue to look to US 10-year yields as the main driver for the pair’s price action. In this regard, yields have advanced to the 2.73% area earlier in the week, levels last seen in 2014.

Looking ahead, the ADP report is expected just above 180K for the month of January, while the FOMC is seen leaving unchanged its monetary status quo at its meeting later today.

USD/JPY levels to consider

As of writing the pair is down 0.01% at 108.77 facing the next down barrier at 108.28 (2018 low Jan.26) followed by 107.33 (low Sep.8). On the other hand, a breakout of 109.70 (10-day sma) would open the door to 109.78 (high Jan.26) and finally 110.81 (21-day sma).