USD/JPY continues gaining traction, jumps to fresh 2-week highs near 111.40

The USD/JPY pair continued gaining traction through early European session and build on previous session's strong gains, jumping to fresh two-week highs near 111.35-40 region.

Today's BoJ decision to leave its monetary policy unchanged, and subsequent comments by BOJ Governor Kuroda, reassuring unwillingness to start discussing exit strategy before reaching the 2.0% target, was seen weighing heavily on the Japanese Yen.

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Against the backdrop of Wednesday's hawkish Fed decision, the BoJ stance seems to have been perceived as dovish and helped the pair to build on sharp recovery move from nearly two-month lows touched ahead of the FOMC announcement on Wednesday.

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Meanwhile, the prevalent positive sentiment around European equity market further dented the Japanese Yen's safe-haven appeal and also collaborated to a strong bid tone surrounding the major.

Today's US economic docket features the release of housing market data and Prelim UoM Consumer Sentiment index for June, which would be looked upon for additional bullish impetus later during the NA session.

Technical outlook

Omkar Godbole, Analyst cum Editor at FXStreet writes: "Last week’s long legged Doji candle and a bullish follow through this week (potential bullish outside week candle) coupled with higher bottom formation (108.13 - April low & 108.80 - Weekly low) indicates the momentum may have shifted in favor of the bulls. The spot looks set to test resistance at 112.00 (zero levels) and 112.13 over the next couple of days. Interestingly, the spot has left a higher bottom formation at the weekly 5-MA, which is now sloping upwards. On the downside, only a daily close below 110.00 would revive the bearish view."