USDJPY failed to make a clear break above the 114.00 threshold earlier this week and remains under a limited selling pressure, holding above 113.00. On Wednesday, the pair was dragged down by risk aversion and lower US 10-year Treasury yields which declined to the lowest since late-October.
As the sentiment improves, the price could resume the upside move down the road. But the key obstacle for dollar bulls is Brexit-fuelled pound optimism. So any negative headline from London or Brussels could spark a correction in the cable, which in turn will support the greenback.
In the short term, traders will focus on the US retail sales report. Market expectations are for a recovery in the retail sales excluding cars by 0.5% versus the previous result of -0.1%. If so, the USD bulls will regain control as strong numbers will cement the December rate hike expectations.