USD/JPY consolidates in a narrow range around mid-112.00s

Having touched a session low level of 112.22, the USD/JPY pair caught some fresh bids and extended previous session's rebound from the vicinity of 200-day SMA support. 

Fading safe-haven demand, reinforced by a goodish recovery in the US Treasury bond yields had been one of the key factors behind the pair's overnight recovery from two-week low level of 111.99.

The up-move was further supported by Dallas Fed President Robert Kaplan's hawkish comments that waiting too long to raise rates may leave the Fed behind the curve and boost odds of a recession.

   •  Fed’s Kaplan: ‘We can afford to be patient on rate hikes’

The pair, however, seemed lacking any strong follow momentum beyond mid-112.00s and was being capped by today's upbeat machinery orders data from Japan and escalating geopolitical tensions between the US and N. Korea. 

   •  White House: Trump, top defence officials, discuss North Korea options – RTRS

Today's key focus will remain on the FOMC meeting minutes, which should influence the USD price dynamics and also help the pair to break through its two-week old trading range. 

   •  Fed minutes to show disinflation to be largely driven by transitory factors – Barclays

On the economic data front, the release of JOLTS Job Openings data from the US might provide some impetus for short-term traders.

Technical levels to watch

Immediate resistance is pegged near 112.70 level, above which the pair is likely to make a fresh attempt to surpass the 113.00 handle and retest 113.25-30 supply zone. 

On the downside, weakness back below 112.20 area might continue to find support near the very important 200-day SMA, currently around 111.90-85 region, below which the pair could slide towards its next support near mid-111.00s.