USD/JPY clings to daily gains, above mid-109.00s post-US data

   •  US PPI falls short of consensus estimates but does little to prompt any meaningful weakness.
   •  A strong follow-through upsurge in the US bond yields remains supportive of the bid tone.

The USD/JPY pair held on to its strong bid tone through the early NA session and had a rather muted reaction the latest US PPI figures.

The US Producer Price Index (PPI) came in to show a modest m-o-m rise of 0.1% for April and 2.6% over the past 12-months, falling short of consensus estimates. The pair dipped below 109.60 level in reaction to weaker than expected readings but did little to prompt any aggressive long-unwinding trade.

Moreover, a positive tone around the US Treasury bond yields, so far, have limited any deeper US Dollar profit-taking slide from fresh yearly tops and remained supportive of the strong bid tone surrounding the major. 

Meanwhile, the Japanese Yen's safe-haven demand was not influenced by a subdued trading action around European equity markets, with the USD/US bond yield dynamics acting as key determinants of the pair's momentum on Wednesday.

Technical levels to watch

Immediate support is pegged near the 109.40 region, below which the pair could slide back towards retesting the 109.00 handle. On the upside, bulls would be eyeing for a move beyond the key 110.00 psychological mark for an extension of the momentum is likely to get extended towards the very important 200-day SMA barrier near the 110.20 region.