The USD/JPY pair edged lower through the early European session and dropped to fresh daily lows, around the 110.10 region in the last hour, albeit lacked follow-through. A combination of factors failed to assist the USD/JPY pair to capitalize on the post-NFP positive move to near two-week tops, instead prompted some selling on the first day of a new week. Investors remain worried that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery. This was evident from a softer tone around the equity markets, which benefitted the safe-haven Japanese yen and exerted some pressure on the major amid a modest US dollar pullback.
The USD/JPY pair, for now, seems to have snapped three consecutive days of the losing streak and stalled last week's solid rebound from the 108.70 region, or the lowest level since late May. That said, any further downtick might still be seen as a buying opportunity and is more likely to remain limited. Friday's stronger-than-expected US monthly jobs report fueled speculations that the Fed could start tapering its asset purchases later this year, which should act as a tailwind for the USD.
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