The high earlier in the day was around 147.20 and tested the overnight high as well. Sellers held and since then, it's been one-way traffic now as we get into European morning trade. USD/JPY is back down to near 146.00, although buyers are very much still in control as evident from the near-term chart above.

The pair has been more volatile than other major currencies in the last two months and things seem to be continuing that way.

The bond market is not doing all too much, with yields down just slightly on the day. Meanwhile, risk sentiment is more cautious but nothing too defensive in the overall picture. S&P 500 futures are down just 0.1% currently.

In FX, the aussie and kiwi are pushed much lower but I would argue that also owes to some slight dollar strength alongside a plunge in iron ore prices on the day. USD/CNY rebounding off its December low yesterday is also another supportive factor there.

Going back to USD/JPY, the drop so far today is not indicative of much. It erases the gains from yesterday but that just threatens to snap a four-day win streak for the pair. If anything, the pair just looks to be consolidating a fair bit in and around 145.00 following the massive plunge since July.

That is until we get the next catalyst for a bigger push. So, let's see what the US data this week has to offer in that regard.