Japanese Yen Retreats on Soft Inflation, USD Strengthens

From a technical standpoint, spot prices indicate a potential rebound below the 142.00 level, seemingly breaking the two-day downtrend. This suggests that the overnight break back below the 200-day Simple Moving Average (SMA) is crucial support for bearish traders. Furthermore, oscillators on the daily chart remain firmly in negative territory, indicating minimal resistance for the USD/JPY pair on the downside. Therefore, any subsequent upward move may still be considered a selling opportunity and remains capped near the 142.75 level (200-day SMA). This implies that further buying activity, leading to a move beyond the 143.00 mark, could trigger short-covering actions and allow the bullish camp to reclaim the round figure of 144.00 in the short term.

On the flip side, weakness below the intraday low around the 141.90-141.85 region would reaffirm the short-term trend, making the USD/JPY pair vulnerable to a retest of the sub-141.00 level or the multi-month lows touched last week. The subsequent decline could potentially drive spot prices towards intermediate support at 140.45 on the way to the psychological milestone of 140.00.