USD/JPY slides to session lows, risks breaking below 109.00 level

• USD/JPY failed to capitalize on the early uptick to weekly tops.
• Bulls seemed unimpressed by improving global risk sentiment.
• Weaker US bond yields exerted some pressure ahead of FOMC.

The USD/JPY pair has now drifted into the negative territory, with bears now eyeing some follow-through weakness below the 109.00 round-figure mark.

The pair failed to capitalize on the overnight goodish positive momentum and a subsequent move to weekly tops during the Asian session on Wednesday, rather met with some fresh supply at higher levels.

Bulls seemed reluctant ahead of the Fed

Bulls seemed unimpressed by a solid recovery in the global risk sentiment, which tends to undermine the Japanese yen's perceived safe-haven demand and a mildly positive tone surrounding the US dollar.

As investors assessed the economic damage from the outbreak of the deadly coronavirus in China, expectations of policy support from the world's major central banks seemed to have revived the optimistic sentiment.

Traders, however, took cues from a turnaround in the US Treasury bond yields, albeit the downside is likely to remain limited ahead of the latest FOMC monetary policy decision later during the US trading session.

The Fed is widely expected to keep interest rates unchanged and hence, the key focus will be on the accompanying statement, which will be looked upon for any major changes and provide a fresh impetus.

Technical levels to watch