USD/JPY knocked down to fresh session lows near mid-109.00s post BoJ headlines

The USD/JPY pair failed to build on previous session's recovery move from 7-week lows and faced rejection near the key 110.00 psychological mark.

The pair's sharp slide over the past hour or so could be attributed to the BoJ news headlines, via Bloomberg. According to Bloomberg, quoting people with knowledge of discussions at the Japanese central bank, the BOJ is re-calibrating its communications strategy to acknowledge future withdrawal of its massive monetary stimulus, without giving an impression that this is on the agenda anytime soon. Immediately after the flashes, the pair knocked off over 40-pips and dropped to session lows near 109.60-55 region.

Investors seemed to look past today's disappointing first quarter Japanese growth figures, coming-in to show a lower-than-expected GDP growth of 0.3% as compared to 0.6% estimated earlier.

   •  Japan’s economy remains in moderate recovery

Meanwhile, a subdued US Dollar price-action did little to provide any impetus to the pair's movement during Asian session on Thursday, while cautious environment ahead of a trio of important event risks - UK election, ECB monetary policy decision and former FBI Director James Comey's Senate testimony, lending some support to the Japanese Yen's safe-haven appeal.

   •  Super Thursday featuring UK elections and ECB looms – ANZ

Technical levels to watch

From current levels, 109.40-35 area is likely to act as immediate support, below which the pair now seems vulnerable to break below the 109.00 handle and test 108.85-80 support area before heading towards 108.40 important horizontal support.

On the upside, the 110.00 handle might continue to act as immediate hurdle, which if cleared decisively could lift the pair further towards 110.35-45 resistance area en-route 110.75 level.