USDJPY – limited reaction on upbeat US inflation numbers keeps bearish bias intact

The pair showed limited reaction on upbeat US inflation data today, as the dollar jumped to 107.53 but quickly fell back, erasing all post-data gains.
Unlike from other major currency pairs where the greenback advanced strongly, USDJPY’s reaction was mild.
Better than expected inflation numbers in January and underlying inflation showing the biggest gains in a year, would further boost expectations for Fed’s more aggressive approach towards the monetary policy this year and likely prompt the central bank for more rate hikes than planned.
Stronger dollar after release of key data pushed stocks lower, which boosted yen and limited dollar’s rally, while Japanese currency also advanced against other major counterparts, registering fresh gains against the Euro and British Pound.
USDJPY’s near-term outlook did not change significantly after strong US data, maintaining bearish bias after rather mild 106.83/107.50 correction (106.83 is new 15-month low posted overnight while 107.50 is the highest traded after release of US CPI data).
Fresh easing cracked 107.00 figure and pressured support at 106.83, eyeing target at 106.51 (Fibo 61.8% of 98.99/118.66, Jun/Dec 2016 rally).
Initial resistance lies at 107.53 (post data / European session high), followed by session high at 107.90 which guards former low and key support at 108.28, where stronger upticks should be capped.

Res: 107.53; 107.90; 108.28; 108.87
Sup: 106.99; 106.83; 106.51; 106.00