USD/JPY surges through 118.00 handle

A fresh bout of greenback buying interest has emerged in the past hour, lifting the USD/JPY pair beyond 118.00 handle to a fresh 10-month peak.

Currently trading around 118.30 region, the pair built on to Wednesday's strong up-move as hawkish Fed outlook continues to underpin the US Dollar. In fact, the overall US Dollar Index is now quoting above 102.00 mark, its highest level since March 2003. Adding to this, positive sentiment around European equity market is further denting the Japanese Yen's safe-haven appeal and assisting the pair's strong up-move on Thursday.

Next in focus would be BOE monetary policy decision, which might trigger some volatility and derive safe-haven demand. Meanwhile, the USD price-dynamics would remain a key determinant ahead of US economic data, due later during early NA session. Today's US economic docket features the release of CPI print for Nov., Philly Fed Manufacturing Index and weekly jobless claims.

Technical levels to watch

The ongoing momentum seems strong enough to continue boosting the pair further towards 118.80 resistance area, which if cleared would open room for continuation of the pair's strong appreciating move towards 120.00 psychological mark in the near-term. On the downside, weakness back below 118.00 round figure mark is likely to drag the pair towards 117.40 support below which the corrective slide could get extended towards 116.00 handle.