USD/JPY slips from 111 as Japan GDP bolsters Yen

• The Dollar takes a step lower against the Yen as markets continue to favour the safe-haven JPY.
• With Japan's GDP out of the way, Friday sees US CPI figures to end the week.

The USD/JPY pairing is testing down into the 110.85 region for Friday after a bump in Japan's GDP readings gave the JPY a boost against the broader market.

Japan's quarterly GDP came in better than expected for early Friday, with Q2's Annualized GDP clocking in at 1.9% versus the expected 1.4% and taking back the previous quarter's -0.2% slide, but risk appetite in Asia remains subdued as trade war tensions continue to weigh on risk overall market sentiment, and the still-sluggish inflation readings for Japan took the wind out of the GDP reading's sails, with the Domestic Goods Price Index coming in at just 0.5% for July compared to the previous month.

Friday now turns towards the upcoming US CPI reading to close out the week, and Core CPI for the year to July in the US economy is expected to hold steady at 2.3%, and Friday promises to see the Greenback making the week's closing moves against the broader market.

USD/JPY levels to watch

The USD/JPY pair is looking sensitive to the downside, and as FXstreet's own Omkar Godbole noted, "the bull breakout seen in the first half of July was short-lived. The pair created an inverted hammer bearish reversal in the following week, neutralizing the bullish outlook and is set to end the current week below the trendline. A break below the 50-day MA would validate the failed breakout seen in the weekly chart above and allow a drop below 110.35 (low of the big bullish candle which ran through falling trendline). A weekly close below 110.35 would confirm a bearish trend reversal on the weekly chart and could yield a deeper drop to 108.00 in a couple of weeks. On the other hand, a weekly close above the falling trendline will likely be followed by a re-test of the recent high of 11.17."