USD/JPY: basing on the 114 handle, better bid despite exporters hedging

Currently, USD/JPY is trading at 114.14, up 0.20% on the day, having posted a daily high at 114.32 and low at 113.87.

USD/JPY is building a base on the 114 handle, with a test of the 114 the figure rejected by the Bulls on a positive performance in European shares.

US CPI Preview: Inflation continues to drift lower - Wells Fargo

The Japanese Yen remains on the defensive after Japan's June machine orders unexpectedly fell while Kuroda, BoJ's governor, reiterated their eagerness to remain flexible on policy amid a still uncertain economic outlook. Despite exporters hedging and buying the yen, or June's nonfarm payrolls disappointment in the benign wage pressures, the dollar continues to outperform ahead of Wednesday's week's prepared remarks from Yellen. 

US: Strong jobs but weak wages - Nomura

Traders will be looking to take clues on whether there is indeed any shift in Fed policy since the bank raised rates June 14; the text will be released at 8.30 am ET on Wednesday ahead of Yellen’s appearance before a House panel at 10 am. 

USD/JPY levels

Analysts at Commerzbank argue that USD/JPY near term outlook is neutral to positive: "USD/JPY remains bid and short term is heading towards the 114.38 recent highs above which will see an extension to the 115.51/62, this year's highs. Very near term, there is little change, we note the TD perfected set up on the daily (which has been ignored so far) and are unable to rule out slippage to the 55 - and 200-day moving averages at 111.80/56. While above here we will remain bid."