USD/JPY in search of a firm direction, stuck in a range near mid-110.00s

   •  Persistent USD selling fails to assist the pair to gain any meaningful positive traction. 
   •  Fading safe-haven demand helped limit any sharp downside, at least for the time being. 

The USD/JPY pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Monday.

A goodish recovery in investors' appetite for riskier assets, as depicted by positive trading sentiment around equity markets, dented the Japanese Yen's safe-haven appeal and helped limit the pair's post-NFP slide. 

However, persistent selling interest surrounding the US Dollar, which continues to be weighed down by Friday's softer US wage growth data, did little to provide any meaningful bullish impetus and restricted the pair within a four-day-old trading range. 

Meanwhile, the market had a rather muted reaction to the BoJ Governor Haruhiko Kuroda's comments, saying that the central bank will continue to control the yield curve until inflation hits their 2% target, with the USD price dynamics and broader market risk sentiment turning out to key determinants of the pair's momentum at the start of a new trading week. 

Moving ahead, Thursday's key release of the latest US inflation figures will grab all the attention and play an important role in determining the pair's near-term trajectory amid escalating fears of a full-blown US-China trade war.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: “The bearish technical charts and the declining US-Japan yield spread indicates the USD/JPY will likely find acceptance below 110.30 (rising trendline support + bear flag support) and drop to 109.46. A violation there would expose support lined up at 108.82 (38.2% Fib R of 104.63-111.40).”