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USD/JPY spikes to 3-1/2 week tops amid notable USD demand

   •  A follow-through USD demand helps build on overnight strong gains.
   •  Risk-on mood offsets upbeat Japanese Q3 final GDP print.
   •  Focus remains on NFP data ahead of next week’s FOMC meeting.

The USD/JPY pair built on overnight bullish momentum beyond the 113.00 handle and jumped to 3-1/2 week tops during the early European session on Friday.

Despite subdued action around the US Treasury bond yields, a goodish pickup in the US Dollar demand has been one of the key factors driving the pair higher for the second straight session.

Adding to this, the prevalent risk-on environment was also seen denting the Japanese Yen's safe-haven appeal and further collaborated to the pair's strong up-move to its highest level since mid-November.

Meanwhile, today's release of better-than-expected final Japanese GDP print for the third quarter of 2017 did little to dent the sentiment, with the USD price dynamics acting as an exclusive driver of the pair's bullish momentum on the last trading day of the week.

Investors focus on Friday would remain glued to the keenly watched US monthly jobs report (NFP), which would drive the greenback ahead of next week's FOMC meeting and provide some fresh impetus later during the NA session. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: "The spot could easily extend gains beyond 114.18 (bull flag breakout target) if the US wage growth numbers beat estimates. On the other hand, a weak data could yield a pullback in the USD/JPY. However, only a close today below 111.99 (Dec. 6 low) would abort the bullish view."

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