USD/JPY consolidates below 113 handle, eyes for 114.00?

Currently, USD/JPY is trading at 112.58, up 0.05% on the day, having posted a daily high at 112.77 and low at 112.35.

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USD/JPY is consolidated after the huge demand for the greenback overnight, where the yen was pushed back to a few pips from the 113 handle from 110.80. The dollar remains elevated on the back of the theme of reflation in the market. The US data was also strong today and the FOMC minutes have left a rate hike on the table for December, although offered nothing new and if anything, a little less confidence due to the lack of conviction. Don't believe the hype, and get real: the Fed will not hike in December and here is why... 

"It's only since the end of the summer , and the switch to targeting 10 year nominal yields that the BOJ has found a more effective policy, aided hugely by the global rise in yields, explained Kit Juckes, economist at Societe Generale, also noting, "The last two weeks have seen real yields rise in the US, Europe and the UK, but fall in Japan. A recipe for the BOJ, finally, to get the FX market response it wants.

USD/JPY levels

"The pair has added over 1,100 pips ever since bottoming at 101.18 following US election's result, but there's still room for further advances up to the 114.00 region, the 23.6% retracement of the Abenomics rally between 2011 and 2015," argued Valeria Bednarik, chief analyst at FXStreet.

Current price is 112.59, with resistance ahead at 112.66 (Daily Classic R3), 112.77 (Daily High), 112.99 (Yesterday's High), 113.72 (Weekly Classic R2) and 116.50 (Weekly Classic R3). Next support to the downside can be found at 112.53 (Daily Open), 112.53 (Monthly High), 112.53 (Weekly High), 112.35 (Daily Low) and 112.27 (Weekly Classic R1).