USD/JPY: headed back to session lows?

The USD/JPY pair failed to build on early European session up-move beyond the 114.00 handle and is now headed towards the lower end of daily range.

Currently trading around 113.70-80 band, the pair ran through some fresh offers near 114.10-15 band amid renewing worries over the US President Donald Trump's ability to push through pro-growth economic policies, especially after his abrupt decision to fire FBI Director Comey. 

Adding to this, the prevalent cautious around European equity market, further reinforced by a sharp slide in the US treasury bond yields, remained supportive for the Japanese Yen's safe-haven appeal. 

Meanwhile, the Japanese Yen was also underpinned by the Bank of Japan Governor Haruhiko Kuroda comments on Wednesday that the central bank will consider publicizing calculations on how a future withdrawal of massive monetary stimulus could affect its financial health. The statement suggested that BoJ might begin considering an exit strategy from its radical stimulus program, sooner rather than later. 

However, a modest greenback up-tick, with the key US Dollar Index reversing early losses and now holding steady around mid-99.00s, seems to have collaborated towards limiting further downslide, at least for the time being. 

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Technical levels to watch

A follow through retracement below 113.50-40 area is likely to extend the corrective slide towards 113.25 intermediate support ahead of the 113.00 round figure mark. On the flip side, sustained momentum above the 114.00 handle, leading to a subsequent move beyond 114.10-15 hurdle (session tops), seems to pave way for continuation of the pair's near-term upward trajectory towards 114.65-70 band en-route the key 115.00 psychological mark.