USD/JPY bulls manage to defend 112.00 mark, for the time being

   •  USD sentiment remains soggy due to the latest tax bill uncertainty.
   •  Reviving safe-haven demand adds to the downward pressure.

The USD/JPY pair stalled its modest Asian session recovery move just ahead of mid-112.00s and dropped to fresh multi-day lows in the past hour, albeit quickly recovered few pips thereafter.

Against the backdrop of perceived dovish FOMC outlook, fresh concerns over the long-awaited US tax cut bill prompted some fresh US Dollar selling on Friday and continued exerting some downward pressure on the pair.

Adding to this, the prevalent negative trading sentiment around European equity markets provided an additional boost to the Japanese Yen's safe-haven appeal and further collaborated to pair's offered tone. 

The pair's slide over the past hour could also be attributed to news headlines, quoting sources, that Japanese government could cut JGB sales to market in FY2018/19 by about JPY7 T from this FY to around JPY134 T. 

Meanwhile, a mildly positive tone around the US Treasury bond yields, which although did little to provide any immediate respite for the USD bulls, might now contribute towards limiting further downslide, at least for the time being. 

Later during the early NA session, the second-tier US economic data - Empire State Manufacturing Index, Industrial Production and Capacity Utilization Rate, would be looked upon for some short-term trading opportunities. 

Technical levels to watch

A clear break through the 112.00 handle is likely to accelerate the fall towards the very important 200-day SMA support near the 111.65 region, below which the pair seems vulnerable to head back towards retesting the 111.00 handle.

On the flip side, any recovery attempts back above 112.25 level might continue to confront fresh supply near the 112.40-50 region, which if cleared might trigger a short-covering bounce towards 112.80-85 hurdle en-route the 113.00 handle.