USD/JPY reverses early gains beyond 112.00 handle to 1-1/2 week tops

The USD/JPY pair failed to build on early up-move to 1-1/2 week highs and retreated back below the 112.00 handle, reversing over 30-pips from session tops near 112.20 level. 

A turn around in the trading sentiment surrounding Asian equity markets, with Japan's Nikkei 225 now slipping in negative territory, supported the Japanese Yen's safe-haven appeal and seems to be a key driver of the pair's pull-back from multi-day tops. However, mixed Japanese economic data (with household spending and Tokyo CPI data falling short of market expectations, while unemployment rate and industrial production beating estimates) might collaborate towards limiting further downslide.

Meanwhile, a consolidative price action surrounding the US Dollar has failed to provide any impetus, with broader market risk sentiment being an exclusive driver of the pair's movement on the last trading day of the week. 

Today's US economic docket, featuring the release of core PCE price index and consumer sentiment index might influence the greenback demand and provide some impetus during early NA session. Also in focus would be speeches by FOMC member Dudley and Kahskari, which would be looked upon for fresh insight over the Fed's near-term monetary policy outlook. 

Technical levels to watch

Immediate support is pegged near 111.60-55 area, below which the pair is likely to drop back towards the 111.00 handle ahead of its next major support near 110.65 level. On the flip side, momentum above 112.20 level (session high) could get extended towards 112.50 resistance before the pair darts towards testing 50-day SMA hurdle near 113.00 round figure mark.