After a false technical break above the 1.12 handle, the dollar came under pressure against the Japanese yen on Thursday and registered decent intraday losses. Today, the pair is making some recovery attempts but the impetus looks unconvincing and too timid, at least so far.
Some selling pressure on the yen came from the economic front. According to the preliminary data, industrial production in Japan was down 0.9 percent in March, the fastest pace in five years. On a yearly basis, industrial production sank 4.6 percent following the 1.1 percent drop in the previous month. The figures suggest that the country’s economy may post a mild contraction in the first quarter.
USDJPY has recovered above the 200-DMA around 111.50 but struggles to get back above the 112.00 level. Further on, the dollar direction will depend on the US Q1 GDP data due later today. Should the numbers surprise to the upside, the greenback will resume the widespread rally. In this scenario, the pair may climb above 112.00 and challenge the 112.20 region.