USD/JPY resumes its strong bullish momentum, surges above 105.00

Following a pause on Wednesday after two days of sharp up-surge, a fresh bout of buying interest around 104.00 region assisted the USD/JPY pair to recover sharply from early Asian session low. The pair has now surged past 105.00 psychological mark for the first time after last month's historic Brexit vote.

The pair continued to build on to its gains above 105.00 handle and jumped session peak level near 105.40 region before retracing few pips to currently trade near 105.20. The pair accelerated its strong momentum above 105.00 mark as traders rushed to cover their short-positions after Honda, advisor to Japanese PM, issued a statement saying the idea of issuing perpetual bonds was discussed with Bernanke in April. 

The Japanese currency has been witnessing intense selling pressure since the beginning of the this week after PM Abe confirmed to announce additional fiscal stimulus, following a victory in Sunday's upper house election. 

News flow surrounding the anticipated additional fiscal stimulus measure from Japanese government would continue to drive the pair in the near-term. Meanwhile, short-term traders will also focus on US weekly unemployment claims and PPI data, later during NA trading session, in order to capture some short-term momentum play.

Technical levels to watch

From current levels, the momentum seems to lift the pair back towards 106.00 handle ahead of 106.82 (June 24 high), above which the pair seems to head towards 107.90 (June 7 high).

On the flip side, 104.00 (Wednesday's low) now seems to act as immediate support, which if broken seems to drag the pair towards 103.40 (July 1 highs) resistance turned support.