USD/JPY tested pre-NFP tops near 113.30, what’s next?

• Benefits from USD rebound, higher USTs
• US data holds the key this week.

The USD/JPY pair extends its rebound from the 112 handle into a fourth day today, as the bulls find fresh impetus from broad-based US dollar rebound.

USD/JPY headed to 113.50

The Yen remains on the back foot amid a better risk sentiment and lack of fresh fundamentals, as the Japanese traders continue to enjoy their holiday-break. Meanwhile, resurgent US dollar demand against its main peers, in response to positive Treasury yields, as markets cheer an uptick in the US wages, which offset downbeat NFP headline numbers.

The major also remains better offered, as markets react to the weekend’s comments from the Japanese PM Abe. Abe said that he is still undecided whether he would re-appoint the BoJ Governor Kuroda t for another five-year term.

Later today, the pair will get influenced by the USD dynamics and sentiment on the global equities, in absence of any macro news from the US docket.

USD/JPY Technical View

Karen Jones, Analyst at Commerzbank, notes, “USD/JPY’s rally off its mid-December low at 112.04 has taken it back to the three-month resistance line at 113.29. If bettered, the 113.64/75 December highs will be back in the picture but may well cap. There is a lot of resistance directly overhead – namely the 113.92 2015-2018 downtrend line. Overhead sits the 114.38/82 major resistance.”