USD/JPY making a hard correction with eyes on 115 handle

Currently, USD/JPY is trading at 114.84, up 0.24% on the day, having posted a daily high at 114.89 and low at 114.55.

USD/JPY is picking itself up from off the floor after a round of supply in the greenback as the Trump trade gets unwound in 2017 with a test below the 114 handle. However, there is plenty of room for a reversal to take shape based on the divergence between the BoJ and the Fed.
"Despite the fairly upbeat tone struck by Kurodo in his December speech, the clear difficulties for the BoJ in reaching its inflation objectives suggest there is little chance of the BoJ stepping back from its aggressive asset purchases programme any time soon," explained analysts at Rabobank. 

Meanwhile, analysts at Bank of Tokyo Mitsubishi explained, "Japanese investors have begun their usual seasonal cash repatriation. Japan has reported current and trade account surpluses, which could weigh heavily on USD/JPY topside at around 116. But the US-Japan yield gap would theoretically keep the lower bound at around 113-114. "

Trump reflation trades unwinding - BTMU

USD/JPY levels

Spot is presently trading at 114.84, and next resistance can be seen at 114.89 (Daily High), 115.19 (Weekly Classic S1), 115.52 (Daily Classic PP), 115.53 (Yesterday's High) and 115.57 (YTD Low). Support below can be found at 114.57 (Daily Open), 114.57 (Monthly Low), 114.57 (Weekly Low), 114.55 (Daily Low) and 114.54 (Hourly 20 EMA).