USD/JPY recovers early lost ground, inches back closer to mid-111.00s

   “¢   A goodish pickup in the US bond yields eases the USD bearish pressure.
   “¢   The recovery move seemed unaffected by the prevalent cautious mood.  

The USD/JPY pair built on its steady climb from an intraday low level of 110.75, or over one-week lows, and is currently placed at the top end of its daily trading range.

Investors now seem to have fully digested the US President Donald Trump’s bearish comments on Friday, with a goodish pickup in the US Treasury bond yields helping to ease the US Dollar bearish pressure.  

In fact, the benchmark 10-year yield is holding near one-month high level of 2.906%, which was seen one of the key factors underpinning the greenback demand and driving the pair higher through the early North-American session.

Meanwhile, the prevalent cautious mood around equity markets, which tends to benefit the Japanese Yen’s safe-haven appeal, did little to influence the momentum, albeit might contribute towards capping any meaningful up-move.

Moving ahead, today’s US economic docket, featuring the release of existing home sales data, will now be looked upon for some short-term trading impetus ahead of the Japanese data – flash manufacturing PMI and BoJ core CPI y/y, due for release during the Asian session on Tuesday.

Technical levels to watch

Any subsequent up-move back above mid-111.00s might trigger a short-covering rally and lift the pair back towards the 112.00 handle en-route 112.25 supply zone. On the flip side, weakness back below the 111.00 handle might now turn the pair vulnerable to break below 110.75 (session low) and head towards testing 50-day SMA support near the 110.55-50 region.