USD/JPY keeps the red below mid-111.00s, near 1-week lows

   •  The USD bulls held on the defensive amid dovish Fed expectations.
   •  Cautious mood underpins JPY and exerts some additional pressure.
   •  Downside remains cushioned amid a mildly positive US bond yields. 

The USD/JPY pair maintained its offered tone and dropped to near one-week lows during the mid-European session on Tuesday, albeit quickly recovered few pips thereafter.

The prevalent US Dollar selling bias, coupled with a cautious mood around equity markets turned out to be one of the key factors exerting some downward pressure on the major for the second consecutive session. 

The USD bulls remained on the defensive in wake of Friday's mixed US jobs data that showed wage growth had slowed in March, which reinforced expectations that the Fed is unlikely to raise interest rates this year.

Meanwhile, comments by a top White House trade official, saying that we're not satisfied with all the issues standing in the way of a deal to end the US-China trade war weighed on investors' sentiment.

This coupled with uncertainty surrounding the UK's exit from the European Union underpinned the Japanese Yen's safe-haven status and collaborated to the pair's ongoing retracement slide from three-week tops set on Friday.

However, the recent leg of a goodish up-move in the US Treasury bond yields, which extended through the European trading session on Tuesday, turned out to be the only factor helping limit further downside.

In absence of any major market moving economic releases from the US, the broader market risk sentiment and the USD price dynamics might act as key determinants of the pair's momentum through Tuesday's trading session.

Moving ahead, this week's important releases of the US consumer inflation figures and minutes from the latest FOMC meeting might play an important role in determining the pair's next leg of a directional move.

Technical levels to watch