USD/JPY rebounds sharply in tandem with Nikkei, above 110.00

The bulls made a solid comeback in mid-Asia, lifting the USD/JPY pair from near 109.60 region to now inch closer towards 200-DMA located at 110.26.

The USD/JPY pair took a sharp U-turn after risk appetite got a further boost from a renewed buying wave caught by the Japanese stocks, while broad based US dollar buying also helped the rate to take-off beyond 110 levels.

The USD index rises +0.15% to flirt with session tops reached at 99.10, while the Nikkei 225 index rallies 1% to 19,061, extending the previous rebound.

However, it remains to be seen if the spot can sustain the recovery, as the uncertainty over Trump’s tax reform plans continue to keep the US yields unmotivated. Moreover, expectations that the BOJ will continue easy money policy until 2% price target is achieved, also adds to the bullish tone in USD/JPY.

Meanwhile, markets shrugged-off upbeat Japanese PPI figures, as focus shifts towards the US datasets due later in the NA session.

USD/JPY Technical levels                 

A break above 110.50/55 (psychological levels/ 9-day high) would expose 110.97 (Apr 11 high) and 111.47/58 (Apr 5 & 10 high). On the other hand, a breach of support at 109.62/60 (daily low/ rising trend line support) could yield a test of 109.15/109 (10-DMA/ round figure) and 108.85 (Apr 21 low).