USD/JPY trims loss in tandem with Nikkei

Fresh bids emerged for the USD/JPY pair near 5-DMA in the Asian, now allowing a minor bounce back above 104.50 levels on improved risk conditions.

USD/JPY re-takes 105?

The dollar-yen pair attempts a tepid bounce as we progress into the early European trading, mainly on the back of recovering Japanese stock markets amid higher oil and easing Brexit fears. At the time of writing, USD/JPY drops -0.22% to 104.54, while the Nikkei 225 index now recovers to 16,100 points, down -0.40% on the day.

However, the recovery looks fragile in wake of a broadly weaker US dollar as Yellen’s cautious stance continues to weigh on the US currency. Meanwhile, markets now await the US existing home sales data and Yellen's 2nd round of testimony due later today amid looming Brexit vote.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 104.84 (Jun 17 high). A break above the last, the major could test 105.05 (Jun 21 high). While to the downside, the immediate support is seen at 104 (round number) and below that at 103.56 (Multi-month low).