USD/JPY consolidates above 112 in tandem with DXY

The USD/JPY pair keeps gains above 112 handle, after having met fresh buyers near 111.70 at Tokyo-open. The spot closely tracks the USD price-action, with the greenback now consolidating the overnight rally against its main competitors.

The USD buying stalled as the treasury yields retreated, in response to Trump’s comments, citing that he is studying ways to 'punish' currency manipulators. Moreover, upbeat Chinese PMI reports lifted the overall market sentiment, weighing further on the safe-haven yen.

A minor-recovery in the Japanese yen lost legs following the release of a series of mixed Japanese economic data, with Japan’s household spending and Tokyo CPI data disappointing markets, while the unemployment rate and industrial figures bettered expectations.

All eyes now remain on the US economic releases due later in the NA session, with the core PCE price index and consumer sentiment data eagerly awaited for next leg higher in the US dollar. Meanwhile, FOMC member Dudley and Kahskari’s speech will also remain in the spotlight.

USD/JPY Technical levels to watch             

The major finds immediate resistance at 112.26/29 (classic R1/ Fib R2). A break above the last, the major could test 112.57 (20-DMA) and 112.96/113 (20-DMA/ round figure) beyond the last. While to the downside, the immediate support is seen at 111.60 (daily pivot) next at 111.37/26 (5 & 10-DMA) and below that at 110.69/50 (Mar 30 low/ psychological levels).