USD/JPY supported above 100.50 amid risk-on rally in equities

The USD/JPY pair manages to keep the bids amid a risk-on rally in the Asian equities, now recovering from a dip to near session lows.

USD/JPY in tight range below 101 handle

The yen regained lost ground somewhat versus its American peer in the last hour, following the headlines that the Japanese government is considering a fresh economic package to stabilize the economy.

However, the yen spike was short-lived, as the bulls fought back control amid a better risk tone in the markets, with the Japanese stocks flying through the roof. At the time of writing, USD/JPY gains 0.11% to 100.69, recovering from a downward spike to 100.56 levels, while the Nikkei 225 index rockets +3.55%.

Meanwhile, despite risk-on sentiment, the major struggles to extend gains as the sentiment towards the Japanese currency remains underpinned after Japan’s PM Abe won the election for the upper house of parliament, which suggests that the voters favour his economic policies.

Next in focus for the major remains the US labour market conditions data and FOMC member George’s speech due later in the NA session.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 100.81/87 (5-DMA/ Daily high). A break above the last, the major could test 101 (round figure). While to the downside, the immediate support is seen at 100.18 (Jul 6 low) and below that at 100.02 (Jul 8 low).