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   “¢   US-China trade optimism dents JPY’s safe-haven status and helped gain traction.
“¢   A follow-through uptick in the US bond yields remained supportive of the up-move.
“¢   A subdued USD demand now seemed to keep a lid on any strong follow-through.

The USD/JPY pair oscillated in a narrow trading band through the Asian session on Monday and was seen consolidating its recent gains to 2-1/2 month tops.

Growing optimism over a possible US-China trade deal, further fueled by a report from the Wall Street Journal on Sunday that the world’s two largest economies could reach a formal agreement at a summit around March 27, continued denting the Japanese Yen’s safe-haven status and remained supportive.

Traders further took cues from the ongoing upsurge in the US Treasury bond yields, with the yield on the benchmark 10-year government bond climbing further beyond the 2.70% mark, albeit a subdued US Dollar demand did little to provide any additional boost and kept a lid on any strong follow-through up-move.

The recent bullish trajectory now seemed to have paused near the 112.00 handle as investors now seemed reluctant to place aggressive bets ahead of this week’s key data risk – the release of the keenly watched US monthly jobs report, popularly known as NFP, scheduled for release on Friday.

In the meantime, the broader market risk sentiment and the USD price dynamics might continue to act as key determinants of the pair’s momentum at the start of a new trading week amid absent relevant market moving economic releases from the US.

Technical levels to watch

A follow-through buying beyond the mentioned handle has the potential to continue lifting the pair towards its next major hurdle near mid-112.00s, above which the momentum could further get extended towards reclaiming the 113.00 round figure mark. On the flip side, any meaningful corrective slide now seems to find immediate support near the very important 200-day SMA, around the 111.35-30 region, which if broken might accelerate the slide back towards challenging the 111.00 handle.