USD/JPY trims soft Japanese CPI-led gains to fresh multi-month highs

The USD/JPY pair reversed majority of its weak Japanese consumer prices-led gains to 8-1/2 month highs and has now moved into neutral territory amid broad based greenback retracement.

Currently trading around mid-113.00s, the pair caught fresh bids during early Asian session on Friday after Japanese consumer price data - National Core CPI, remained in negative territory for eighth consecutive month in November. Meanwhile, Tokyo Core CPI also came-in to show deflationary pressure for the eleventh straight month. Today's softer Japanese CPI prints provided additional boost to the prevalent bullish sentiment surrounding the major. 

Bulls, however, took a breather at higher level amid near-term overbought conditions. Moreover, with no major market-moving releases scheduled from the US, traders seemed inclined to take some profits off the table and could be the only factor triggering the pair's retracement from multi-month highs. 

However, given that market already seems to be pricing-in a certain Fed rate-hike action in December, any corrective slide might now be utilized to initiate fresh long positions and hence, are likely to be short-lived.

Technical levels to watch

Immediate downside support is pegged at 113.20 (session low) below which the pair is likely to drift below 113.00 handle towards 112.50-45 support area. On the upside, 113.90 (session peak), closely followed by 114.00 round figure mark, seems to act as immediate resistance, which if cleared should open room for continuation of the pair's upward trajectory further towards March monthly highs resistance near 114.50 region.

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