USD/JPY consolidates daily losses, just above mid-106.00s ahead of US data

   •  Subdued USD price action fails to assist build on overnight strong gains.
   •  Weaker US bond yields offset risk-on mood and does little to support.
   •  Traders now await US economic releases for some fresh impetus.

The USD/JPY pair held on to its weaker tone through the mid-European session and was now seen consolidating in a range, just above mid-106.00s.

With investors looking past Wednesday's bullish US GDP growth figures, a subdued US Dollar price action did little to assist the pair to build on overnight strong gains to the 107.00 handle, or over two-week tops. 

Bears further tracked a modest retracement in the US Treasury bond yields and largely shrugged off a goodish pickup in the European equity markets, which tends to weigh on the Japanese Yen's safe-haven appeal. 

Meanwhile, possibilities of some profit-taking, especially after yesterday's largest daily percentage gains in around six months, could also be one of the factors behind the pair's softer tone on Thursday.

Traders now look forward to the US economic docket, featuring the releases of core PCE price index, personal income/spending data, the usual initial weekly jobless claims, Chicago PMI and revised UoM consumer sentiment, for some fresh impetus.

Technical levels to watch

Weakness below the 106.40 level is likely to accelerate the fall back towards the 106.00 handle, below which the pair could fall back to test the 105.35 support area. On the flip side, 106.85 level now seems to act as an immediate resistance, above which the pair is likely to surpass the 107.00 handle and aim towards testing the 107.35-40 supply zone.