USD/JPY inching back closer to 113.00 handle

The greenback gained some fresh traction at the start of a new trading week and pushed the USD/JPY pair back closer to the 113.00 handle. 

Growing market conviction that the Fed would stick to its plan for gradual monetary policy tightening underpinned the US Dollar demand and has been one of the key factors driving the pair higher for the second straight session.

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On the economic data front, the Japanese Tankan Manufacturing Index rose to the highest level in a decade, showing large manufacturers were confident about the business outlook during the second quarter of 2017. 

   •  Bank of Japan Tankan index for large manufacturers hit 10-year high

The upbeat release, however, did little to lend any support to the Japanese Yen, with persistent USD buying interest acting as an exclusive driver of the pair's up-move through Asian session on Monday.

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Later during the NA session, the release of US ISM manufacturing PMI and a scheduled speech by the Dallas Fed President Robert Kaplan would now be looked upon for some fresh impetus. 

Technical levels to watch

Momentum above the 113.00 handle is likely to confront resistance near the 113.20-25 region, above which the pair is likely to head towards testing an intermediate resistance near 113.50-55 zone before eventually darting towards the 114.00 handle.

On the downside, mid-112.00s now seems to have emerged as immediate support, which if broken is likely to accelerate the fall towards 112.20 level en-route the very important 200-day SMA support near the 112.00 handle.