USD/JPY jumps to fresh 3-week highs near 106.30

The recovery in the USD/JPY pair from 105 handle gained further traction following the Chinese data release, sending the rate almost 50-pips higher over the last hour.

USD/JPY regains 106 and beyond

The bid tone around the USD/JPY pair keeps growing bigger, largely on the back of aggressive selling seen in the yen after the prevalent risk sentiment got a further boost from bettering expectations Chinese macro news, which diminished the safe-haven bids for the Japanese currency. At the time of writing the USD/JPY pair is seen testing fresh three-week high reached at 106.31, recording a +0.82% gain so far this session.

Moreover, the major tracks the risk-on rally in the Japanese stocks, with the Nikkei 22 index extending gains over 1% to trade near 16,600 levels. Further, a minor-recovery staged by the black gold also underpins the upbeat risk trends, adding to the upside in the USD/JPY pair.

With the Chinese data dump behind, focus remains solely on the US economic releases due later in the NA session. The US calendar offers CPI, consumer sentiment and retail sales data for today.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 106.50 (Multi-week highs). A break above the last, the major could test 106.85 (post-Brexit high). While to the downside, the immediate support is seen at 105.77 (50-DMA) and below that at 105.09 (daily pivot).