USD/JPY extends overnight rejection slide from 110.00 mark

   •  A modest USD retracement prompts some profit-taking slide.
   •  US-China trade tensions further underpin JPY’s safe-haven demand.
   •  US ISM PMI eyed for some impetus ahead of Friday’s NFP.

The USD/JPY pair traded with a bearish bias through the Asian session on Thursday and dropped to a fresh session low in the last hour, albeit recovered few pips thereafter. 

The pair extended previous session's post-FOMC rejection slide from the key 110.00 psychological mark, near 3-month tops, and was further weighed down by a weaker tone surrounding the US Dollar. 

The Fed reaffirmed that inflation is moving closer to its target but failed to support market expectations over steeper tightening path and did little to provide any additional boost to the recent USD rally. 

Meanwhile, low expectations from trade talks between the US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu weighed on investors risk appetite and was further seen underpinned the Japanese Yen's safe-haven demand.

Traders now look forward to the release of US ISM non-manufacturing PMI for some short-term opportunities. The key focus, however, remains on Friday's keenly watched US non-farm payrolls data (NFP), which will help investors determine the pair's next leg of directional move. 

Technical levels to watch

The 110.00 handle might continue to act as an immediate resistance and is followed by the very important 200-day SMA barrier near the 110.25 region. On the flip side, 109.60-50 area might continue to protect the immediate downside, which if broken might prompt some aggressive long-unwinding trade and drag the pair further towards retesting the 109.00 handle.