USD/JPY bounces off six-week lows, retakes 113.00 handle

Having touched a fresh six week low near 112.60 region, the USD/JPY pair staged a goodish rebound and built on to its recovery back above 113.00 handle.

Currently trading around 113.25 region, testing session peaks, reviving US treasury bond yields is helping the greenback to reverse part of yesterday's sharp slide. On Tuesday, the key US Dollar Index fell sharply after the US President-elect Donald Trump and his senior adviser commented over the risk of a stronger greenback. 

Meanwhile, improving investor risk-appetite, as depicted by positive sentiment surrounding equity markets, is further driving flows away from safe-haven currency Japanese Yen and assisting the pair's recovery move from the lowest level since Nov. 30.

Later during NA session, US economic docket, featuring the release of US CPI, capacity utilization and industrial production data, would be looked upon for fresh impetus. Also in focus would be the Fed Chair Janet Yellen's speech, which might provide some fresh insight over the central bank's near-term monetary policy outlook and eventually derive greenback demand.

Technical levels to watch

The ongoing recovery move is likely to confront immediate resistance near 113.65 level (Jan. 16 low) above which the pair is likely to head towards testing 50-day SMA resistance near 113.85 region ahead of 114.00 round figure mark. 

On the downside, 112.60 level now seems to have emerged as immediate support, which if broken is likely to accelerate the slide towards 112.00 round figure mark with some intermediate support near 112.35 level.