USD/JPY hits 116.00 handle amid prevalent risk-on mood

The USD/JPY pair maintained its strong bid tone and jumped to 116.00 handle for the first time since Feb. 8.

Weekend oil output deal between OPEC cartel and non-OPEC producers led to a fresh wave of risk-on trade on Monday and is seen weighing heavily on traditional safe-haven assets, including the Japanese Yen. Even the upbeat release of Core Machinery Orders from Japan did little to restrict the pair's strong up-move on Monday. 

Meanwhile, the bullish US Dollar consolidative move, amid firm expectations of an imminent Fed rate-hike action on Wednesday, is also supportive for the pair's strong up-move to 10-month peak. 

Investors will also look forward to the Fed's updated economic and interest rate projections (dot-plots), accompanying the monetary policy decision announcement, in order to evaluate possibilities and timing of next Fed rate-hike move in 2017, which would eventually provide fresh impetus for the pair's next leg of directional move. 

Technical levels to watch

A follow through buying interest has the potential to continue boosting the pair towards its next major hurdle near 116.75 region, with 116.50 region (Jan. 21 low) acting as intermediate resistance. On the downside, weakness below 115.50-40 immediate support could get extended towards session low support near 115.15 level below which the pair could extend its corrective slide towards 114.50 region.