USD/JPY reaching for 110.00 with US inflation numbers looming

• The Yen is still backing away from the US Dollar as Dollar-buying remains in fashion.
• US inflation coming up is the week's headline event.

The USD/JPY pair is flat so far for Thursday's trading, cycling around 109.70 through the Asia session.

The Dollar rallied sharply higher against the Yen yesterday, taking the pair clean over the 109.00 handle. Thursday started off quiet, with the Bank of Japan's (BoJ) Summary of Opinions showing nothing new for the JPY; the BoJ is dedicated to their hyper-easy monetary approach, and with inflation still far below their 2% target, is unlikely to change tack anytime soon. 

Dollar-denominated pairs have been sidelined with market participants awaiting the US inflation figures due today at 12:30 GMT, and the US CPI headline year-on-year for April is expected to print at 2.2%, an uptick from the previous 2.1%. Traders are awaiting the inflation reading, as markets are waiting for signs that the US Fed will add on another rate hike this year, bringing 2018's total up to four from the planned three rate hikes through 2018.

USD/JPY analysis: yields pushed it higher, but still below 110.00

USD/JPY levels to watch

FXStreet's own Valeria Bednarik summed up the USD/JPY's stance heading into Thursday's rate event, and the technical caveats awaiting the pair: "US inflation will be out this Thursday, but has little chances of being a major catalyst, as the Fed has hinted that policymakers are willing to be tolerant with inflation pivoting around 2.0%. At the time being, the short-term picture is bullish for the pair despite a limited upward momentum, as technical indicators in the 4 hours chart advanced above their mid-lines before losing their upward strength, holding in positive ground. In the same chart, the 100 SMA continues advancing alongside with an ascendant trend line, both today at in the 108.70/80 region, providing a relevant support in the case of a downward move."

Support levels: 109.20 108.80 108.50  

Resistance levels: 110.00 110.40 110.85