USD/JPY trims gains, still well bid around 117.90

Having posted a session high at 118.24, the USD/JPY pair trimmed some of its post-BOJ strong gains and has now dropped back below 118.00 handle, albeit maintained strong bid tone. 

Currently trading around 117.90 level, the prevalent cautious sentiment around European equity market is lending some support to the Japanese Yen's safe-haven appeal and hindered the pair's strong up-move beyond 118.00 handle after BoJ maintained status-quo monetary policy stance. 

Meanwhile, the US Dollar was also seen making a move back towards last week's 14-year high, supported by Monday's optimistic comments from the Fed Chair Janet Yellen on the US labor market conditions. Moreover, market participants remain convinced that the incoming Trump administration's aggressive fiscal policies will further boost US economic growth and lift inflationary pressure, eventually forcing the central bank to opt for tigher monetary policy stance. 

Hence, the incoming US macro data, including the final print of US GDP growth, will remain on investors' radar and would help determine the pair's near-term trajectory.

Technical levels to watch

The pair is reversing from 118.20-25 immediate hurdle, and hence a follow through selling pressure has the potential to drag the pair back towards 117.20 support area, en-route 117.00 handle before eventually dropping to 116.70 support area. On the upside, 118.20-25 remains immediate resistance, which if conquered should lift the pair beyond last week's 10-month high resistance near 118.66 level, towards testing 119.00 round figure mark.