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USD/JPY stable above 111.00 handle ahead of US data/Fedspeaks

   •  Extends overnight steady recovery move from 2-1/2 month lows.
   •  A modest uptick in the US bond yields/USD lending support.
   •  Improving risk appetite provides an additional boost.

The USD/JPY pair held on to its recovery gains through the mid-European session and is currently placed at the top end of its daily trading range, around the 111.25-30 region.

The pair extended overnight steady recovery move from 2-1/2 month lows and was being further support by a follow-through uptick in the US Treasury bond yields, which was seen lending some support to the US Dollar.

Adding to this, the prevalent positive trading sentiment around European equity markets was further seen weighing on the Japanese Yen's safe-haven appeal and remained supportive of the pair's bid tone.

It, however, remains to be seen if the up-move is backed by any genuine buying or is just a short-covering bounce amid prolonged uncertainty over the long-awaited US tax reform legislation. 

Investors now look forward to the New York Fed President William Dudley's scheduled speech for some trading impetus, ahead of the Fed Chair Designate Jerome Powell's confirmation hearing and the US economic docket, featuring the only release of US CB consumer confidence index.

Later in the day, comments by Philadelphia Fed President Patrick Harker and the US Treasury Secretary Steven Mnuchin might also infuse some volatility in the FX market. 

Technical levels to watch

Any subsequent recovery move beyond mid-111.00s is likely to confront fresh supply near the 111.70 region (200-day SMA), above which the pair is likely to aim towards reclaiming the 112.00 handle.

On the flip side, the 111.00 handle now becomes an immediate support to defend, which if broken could accelerate the slide towards 110.70-65 intermediate zone en-route 110.30-20 support area.
 

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