USD/JPY struggles near multi-month lows, around 108.00 handle

   •  Increasing Fed rate cut bets continue to weigh on the USD.
   •  Fading safe-haven demand helped limit further downside.
   •  Traders now eye US economic data for some fresh impetus.

The USD/JPY pair struggled near 4-1/2 month lows, with bearish traders awaiting a follow-through weakness below the 108.00 round figure mark.

The US Dollar continued with its recent weakening trend amid firming expectations that the Fed will eventually move to cut interest rates by the end of this year, especially after the Fed Chair Jerome Powell on Tuesday refrained from repeating the central bank's patient stance.

A day after St. Louis Fed President James Bullard's comments that a rate cut may be needed soon, Powell said that the Fed will act as appropriate to sustain the expansion. The possibility of an interest rate cut kept the USD bulls on the defensive and kept exerting some pressure on the major.

Bearish traders further took cues from some renewed downtick in the US Treasury bond yields, albeit a slight improvement in the global risk sentiment dented the Japanese Yen's relative safe-haven status and might now turn out to be the only factors limiting any further downside, at least for now.

Moving ahead, Wednesday's US economic docket - highlighting the release of ADP report on private sector employment and the ISM non-manufacturing PMI, will now be looked upon for some short-term trading opportunities later during the early North-American session.

Technical levels to watch