USD/JPY trims losses as Nikkei turns higher, 113 back on sight

A renewed risk-on wave appear to have caught the USD/JPY pair last hour, allowing a minor-recovery in the major from daily lows struck near 102.60 region.  

USD/JPY testing stronger offers ahead of 102.80

The dollar-yen pair is seen making minor-recovery attempts as improved risk sentiment continues to remain a drag on the safe-haven yen. While the Japanese benchmark, the Nikkei 225 index, stalls its retreat and turns back higher towards daily tops, underpinning the bulls somewhat.

Moreover, strengthening demand for the US dollar across the board, following the recent series of upbeat US fundamentals, also lifted the sentiment around the USD/JPY pair. At the time of writing, USD/JPY trades modestly flat at 107.78, trying hard to regain 103 barrier. While the Nikkei jumps +0.85% versus +0.50% seen earlier on the day.

The major dropped as much as 102.61 levels this Thursday, after the yen remained strongly bid on better-than expected Japanese industrial output data release. Industrial production fell 2.3% m/m in May, coming in better than the forecast of -0.1%.

Next of note for the major remains the US economic releases, including that unemployment claims Chicago PMI index, which will provide further hints on the US economic prospects. While the Japanese CPI figures along with China’s PMI reports due tomorrow will also remain in focus going forward.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 103.02 (Daily high). A break above the last, the major could test 103.19 (post-Brexit high). While to the downside, the immediate support is seen at 102.50 (5-DMA) and below that at 101.82 (Daily S2).