USD/JPY clings to gains near YTD tops, around 114.00 handle

   •  The USD bulls held on the defensive after weaker than expected US ISM PMI.
   •  Surging US bond yields/risk-on mood remains supportive of the bid tone.

The USD/JPY pair maintained its strong bid tone near YTD tops and is now seen making a fresh attempt to build on the momentum further beyond the 114.00 handle.

A combination of supporting factors assisted the pair to build on the last week's strong bullish momentum; albeit a subdued US Dollar demand failed to provide any additional boost and kept a lid on any further up-move.

A fresh wave of an upsurge in the US Treasury bond yields, coupled with the prevalent risk-on mood, which tends to undermine the Japanese Yen's safe-haven status remained supportive of the positive of the strong bid tone for the seventh session in the previous eight. 

However, the USD bulls held on the defensive following a slight disappointment from today's release of the US ISM manufacturing PMI, coming in at 59.8 for September as compared to 61.3 previous, and failed to assist the pair to build on its upward trajectory. 

It would now be interesting to see if bulls are able to maintain their dominant position or the current pause marks the end of the recent bullish run as market participants look forward to Friday's keenly watched US monthly jobs report (NFP) for fresh directional impetus.

Technical levels to watch

Immediate resistance is pegged near the 114.40 region, above which the pair is likely to surpass the 114.75 supply zone (Nov. 2017 highs) and aim towards reclaiming the key 115.00 psychological mark. 

On the flip side, any immediate corrective slide is likely to find support near the 113.65 area, which if broken might prompt some long-unwinding trade and accelerate the fall further towards the 113.00 handle.