USD/JPY jumps to 101.50 on news of additional stimulus

The USD/JPY pair gained further traction after Japanese PM Abe confirmed announcement of fresh stimulus on July 12, lifting the pair to session high level of 101.50.

A fresh wave of risk-on rally across Asian equity markets, led by Friday's blockbuster US NFP headline print, provided the initial respite for the USD/JPY bulls. The momentum got an additional boost after Abe instructed the government to compile stimulus measures, for a rumored amount of 10 trillion Yen, in order to support the fragile economy. 

In absence of any major economic releases on Monday, the pair might continue to be driven by risk sentiment surrounding global equity markets. Upbeat sentiment around equity market and prospects of additional stimulus might continue to keep the Japanese Yen suppressed and could further boost the USD/JPY pair. 

Technical levels to watch

From current levels, a sustained move above 101.50 level, previous strong support turned immediate resistance, has the potential to lift the pair back above 102.00 handle towards testing its next major resistance near 102.50-55 region. On the flip side, 101.30 level, closely followed by 101.00 round figure mark, now seems to provide immediate support. Failure to hold these immediate support levels might now negate possibilities of any further bullish momentum.