USD/JPY: trading on the 109 handle, bulls taking back control

Currently, USD/JPY is trading at 109.14, up 0.22% on the day, having posted a daily high at 109.24 and low at 108.87.

• Forex today: dollar corrects in an improved risk-on session
• Wall Street rises on improved risk sentiment

USD/JPY is up onto the 109 handle with the greenback making tracks to the upside on the back of a better bid US session, US stocks making a strong recovery and US yields climbing higher. Investors minds were put at ease following a number of weeks;s of concern that Trump's fiscal plans that had been priced into the market will not come to fruition in the time scale predicted previously. Overnight, and following last week's jawboning by Trump over the value of the dollar, Treasury Secretary Steve Mnuchin said, in stark contrast to Trump, that he still expects a tax deal in 2017 while stressing the longer term benefits of dollar strength. 

• Key US data coming up for the day ahead - Nomura

USD/JPY levels

• USDJPY: Reaching a new trend low of 108.12

USD/JPY has 109.30 resistance up ahead followed by 109.70. To the downside, 108.80 guards 108.40 and the next long term support is seen down at 107.60/50 on the wide. "With any further breakdown below 108.00 support, the next major downside target is around the key 105.50 support area," explained James Chen at Forex.com.

"Rallies will find initial resistance at 112.57 (55-day ma) but only above 115.62, would we look for a challenge to the key short-term resistance offered by the 16-month resistance line at 117.31," argued analysts at Commerzbank who noted that USD/JPY near term outlook is negative in their opinion.