USD/JPY retreats as bulls struggle at 114.00 handle

   •  Struggles to build on strength beyond 114.00 handle
   •  Weighed down by safe-haven demand 
   •  Downside seems limited, amid diverging monetary policy outlook

The USD/JPY pair met with some fresh supply on Wednesday and eroded part of previous session strong up-move back closer to 3-month tops. 

Yen boosted by safe-haven demand

With the US Dollar entering a bullish consolidation phase, the prevalent weaker trading sentiment around Asian equity markets was seen lending some support to the Japanese Yen's safe-haven demand and has been one of the key factors weighing on the major.  

However, speculations that the next Fed Chair could be more hawkish remained supportive for a strong follow-through upsurge in the US Treasury bond yields and might contribute towards limiting any immediate sharp downslide. 

Diverging monetary policy outlook could limit downside

Moreover, investors remain convinced that the Japanese PM Shinzo Abe's victory in Sunday's snap election has reaffirmed that BoJ would continue with its ultra-loose monetary policy stance. Hence, any near-term corrective slide might now be looked upon as an opportunity to initiate fresh bullish positions amid diverging monetary policy outlook. 

Today's US economic docket features the release of durable goods orders, which would now be looked upon for some fresh impetus later during the NA session.

Technical levels to watch

Immediate support is pegged near mid-113.00s, below which the corrective slide could get extended towards the 113.00 handle ahead of 112.85-80 horizontal support.

On the upside, the 114.00 handle remains an immediate strong hurdle, which if conquered could accelerate the up-move towards yearly tops resistance near mid-114.00s before the pair eventually darts towards reclaiming the key 115.00 psychological mark.