USD/JPY bulls taking charge in Tokyo open, testing key resistance

USD/JPY has been ticking up in the Tokyo open as the greenback continues to march on, with investors enthused by the potential outcome of the tax cuts for US corporations and what that will mean of repatriations of dollars as well. Currently, USD/JPY is trading at 112.36, up 0.14% on the day, having posted a daily high at 112.42 and low at 112.20.

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Risk on markets in play

Indeed, the risk on continues and was solid overnight, with the Bond markets generally stronger, with the yield on the US 10-year note falling to 2.32%. Bund yields were 2.5bps lower. Oil also weakened, with WTI off 2.4%. Gold being a touch lower as well (-0.1%), all weighing on the yen.

USD/JPY levels

Overnight, the rebound attempt faltered at Tuesday's 112.38 low, but the bulls are having another go on Asian desks today and will leave the downside in check for the time being, where otherwise, a sub-111.97, ( daily Tenkan at 111.97), close would target 110.85/88 Cloud base & Nov lows. Meanwhile, Valeria Bednarik, chief analyst at FXStreet explained that, technically, the 4 hours chart for the pair shows that the risk remains towards the downside, as despite it has managed to advance modestly above an anyway bearish 100 SMA, technical indicators hold within bearish territory, with very limited upward strength. "The pair would need to accelerate through 112.60, the immediate resistance, to shrug off the negative stance,  yet renewed selling interest below the 112.00 threshold will likely result in a slide towards the 111.20 region, a strong static support."