The USD/JPY pair traded with a negative bias through the early European session and refreshed daily lows in the last hour, with bears now awaiting sustained weakness below the 109.00 mark. The pair struggled to capitalize on the previous day's hawkish FOMC minutes-led rebound from one-week lows, around the 108.55 support zone and met with some fresh supply on Wednesday. A modest pullback in the US Treasury bond yields kept a lid on the attempted US dollar recovery from multi-month lows. This, in turn, was seen as a key factor that exerted some downward pressure on the USD/JPY pair.

Bearish traders further took cues from a generally softer tone around the equity markets, which tends to underpin demand for the safe-haven Japanese yen. That said, the downside remains cushioned, at least for the time being, amid hints that the Fed has begun debating on QE tapering. This makes it prudent to wait for some follow-through selling before positioning for any further depreciating move. Market participants now look forward to the US economic docket, featuring the release of the Philly Fed Manufacturing Index and the usual Initial Weekly Jobless Claims, for some impetus. Apart from this, the US bond yields will also influence the USD price dynamics. Traders will further take cues from the broader market risk sentiment to grab some meaningful trading opportunities around the USD/JPY pair.