USD/JPY clings to recovery gains, around mid-108.00s

The USD/JPY pair continued gaining some positive traction through early European session and refreshed session tops in the last hour, albeit quickly retreated few pips thereafter.

North Korea's inaction over the weekend eased concerns of a military conflict in the Korean Peninsula and was seen weighing on traditional safe-haven currencies - like the Japanese Yen. 

Against the backdrop of global risk-on trade, a strong pickup in the US Treasury bond yields, underpinned the US Dollar demand and assisted the pair to extend its recovery move from near 10-month lows touched on Friday.

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In absence of any major market moving economic releases on Monday, the pair remains at the mercy of broader market risk sentiment and the USD price dynamics, which would now take cues from this week's important US macro data. 

Technical levels to watch

Immediate support is pegged near 108.25-20 zone, below which the pair could drift back to the 108.00 handle en-route 107.70 horizontal support. On the flip side, a strong follow through buying interest beyond the 108.50-60 region now seems to pave way for continuation of the pair's recovery move towards the 109.00 handle ahead of 109.25 level.