USD/JPY off-highs, flirts with 118.00

The renewed uptick in USD/JPY lost steam near 118.20 levels, with retreat in treasury yields sending the rate back to 118 handle.

The pair is last seen exchanging hands at 118.02, reversing a brief dip to 117.87 over the last hours, up 0.25% on the day. The USD/JPY pair is seen enjoying some gains as full markets return and reflect their renewed confidence in the US economy and Trump’s policy by piling onto the US dollar against a basket of major currencies.

While a fresh rally in the Japanese stocks also underpin the sentiment around USD/JPY. However, latest leg down in the major can be attributed to an upside consolidation phase in the USD index, as the US treasury yields drift slightly lower.

Focus now remains on the FOMC Dec meeting minutes due to be reported in the NA session, while Thursday’s ADP data and Friday’s payrolls data will be also closely eyed for fresh direction on the buck.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 118.19 (daily high). A break above the last, the major could test 118.60/67 (Jan 3 high/ 10-month high) and 119 (zero figure) beyond the last. While to the downside, the immediate support is seen at 117.85 (daily pivot) next at 117.39 (5-DMA) and below that at 117.09 (daily S1).