USD/JPY gearing up for another run at 106.00

• The Yen is walking back yesterday's gains after risk flight gripped broad markets.
• A quiet showing for the Yen this week on the macro calendar leaves risk sentiment in the driver's seat.

The USD/JPY pair has recovered from Monday's decline, and the Yen is releasing its grip in Asia trading. The pair is back above 105.80 and trying to stabilize for a further run after bottoming near yesterday's low at 105.65.

Tuesday is a thin showing for Asia economic data, and the week's focus has turned to increasing trade tensions between the US and China after China retaliated with their own set of tariffs on US goods over the weekend, which they announced last week. The tariffs represent another step closer to an all-out trade war between the two nations, and traders are uneasy as brinkmanship plays heavily on broad market sentiment.

It's Non-Farm Payrolls week in the US, but risk sentiment will be weighing heavily until the US jobs report drops on markets on Friday.

USD/JPY Levels to watch

The current technical outlook for the Yen remains in place, and as FXStreet's own Valeria Bednarik noted, "the pair surged by the end of last week, but selling interest rejected it at around 107.00, a sign that bears are still in the driver's seat. Technically, the 4 hours chart shows that the price has broken below the 100 and 200 SMAs, while technical indicators have turned sharply lower, heading south with a strong downward momentum within negative territory, anticipating some further declines on a break below the 105.50 region, now the immediate support."

Support levels: 105.50 105.10 104.70   

Resistance levels: 106.00 106.40 106.80