Dollar/yen dropped as the page turned into June, reflecting the dollar's weakness. Here is an outlook for the key levels to watch on the pair with a note of key movers.

We cover the top fundamental news and outlook, a technical analysis on the daily chart and finally sentiment for the pair moving forward.

USD/JPY fundamental movers

USD/JPY was under pressure early in the week due to yet another missile test by North Korea. The Japanese yen attracts flows in times of trouble, even if the trouble is in Japan's neighborhood. The pair then advanced on positive data from the US, mostly the ADP  NFP.

The final blow came from the US Non-Farm Payrolls: the US gained only 138K jobs in May and more importantly, wages remained stuck at 2.5% y/y.

In general, $/yen hardly moves on Japanese events. One event does stand out. Japan publishes its final GDP estimate for Q1 2017. A small upgrade from 0.5% to 0.6% is expected. It is published on Wednesday at 23:50 GMT.

Updates:

USD/JPY Technical Analysis

The current range for the pair is the wide area between 110.20 to 111.60. Both served as double bottoms in the past.

Looking up, 112.20 is resistance after capping the pair in April and in May. It is followed by the round level of 113, which was a stepping stone on the way up. Further resistance is at 113.60 which served as resistance in the past.

The cycle high of 114.30 is a strong level of resistance, the highest since March. Further above, 115 and 115.35 are notable.

Looking down, 109.50 was a gap line in late April, a gap that was never closed. Further below, the cycle low of 108.10 is of high importance. Looking lower, we are back to levels seen in November, but the door is basically open to 105.

USD/JPY Daily Chart

USD/JPY Sentiment

The pair mostly reflects the expectations for a rate hike by the Fed in June. The main data points are behind us and they do not look good. If the Fed raises rates, it is mostly due to its own forward guidance. It is hard for the Fed to retreat from expectations it had created.