USD/JPY spikes to fresh session tops, 113.00 mark back on sight

   •  Resurgent USD demand/US bond yields supportive.
   •  Reviving safe-haven demand could cap additional gains.

The USD/JPY pair finally broke out of its consolidative trading range and spiked to fresh session tops, around 112.75-80 band 

The pair had a rather muted reaction to the disappointing release of US trade balance data, with resurgent greenback demand turning out to be a key driver of the pair’s strong up-move over the past hour or so. 

Against the backdrop of optimism over the passage of a major tax reform plan by the US Senate, surging US Treasury bond yields underpinned the US Dollar and remained supportive of the strong bid tone surrounding the major. 

Meanwhile, a slight deterioration in investors' risk appetite, as depicted by negative trading sentiment around equity markets, was seen benefiting the Japanese Yen's safe-haven demand and might now contribute towards keeping a lid on any additional up-move.

Traders now look forward to the release of ISM non-manufacturing PMI for some fresh trading opportunities, with bulls now eyeing a bullish break through the 113.00 handle even with a slightly better-than-expected PMI print. 

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes, "the pair ranges between the mentioned low and a daily high of 112.69, offering a neutral technical stance in the short term, as in the 4 hours chart, it's developing between is 100 and 200 SMAs, with the largest capping the upside around 113.05, while technical indicators hover around their mid-lines, with limited directional strength. Better-than-expected US data and a recovery in equities should lead to a recovery towards this week's highs in the 113.00/10 region, but further gains seem unlikely for today."