USD/JPY pushing for 107.00 as Dollar bid returns

• Dollar buying is back Friday after a decline.
• BoJ, inflation keeping the Yen subdued for now.

USD/JPY is trading on the high side heading ahead of European markets, testing into the 107.00 major level as of writing.

Inflation is on the rise in Japan, and following positive CPI earlier today, the Yen is counter-intuitively on the decline as risk appetite rears its head in Asia markets.

Despite Thursday's steep decline in the US Dollar as bond yields retreat, USD/JPY is still showing bullish potential, halting the decline heading into Friday's overnight session.

Yen buying is going to be capped moving forward as rhetoric from the Bank of Japan (BOJ) warning markets the Yen is too strong, and a market intervention could be on the cards to protect the Japanese economy and its fledgling inflation figures.

USD/JPY Technicals

Following the Dollar's bounce from 105.55, Thursday's decline brings the pair directly to the 50.0 Fibo retracement level, and bullish potential for the pair remains high. Daily candles are still testing the rapidly declining trendline, and a further push higher will see the line break and begin providing support for the pair going forward. Support on lower timeframes can be found at 106.72 and yesterday's low of 106.59, while resistance is priced in at 107.15 and 107.35.