USD/JPY spikes back closer to session tops, around 113.25 level

   •  Today’s BoJ decision turns out to be a non-event. 
   •  US bond yields rebound and underpin the USD demand.
   •  Fed Chair speculations might cap additional gains. 

The USD/JPY pair reversed a dip to sub-113.00 level and jumped back closer to session tops, recovering around 30-pips from over one-week lows. 

With investors looking past today's BoJ decision, which turned out to be a non-event for the markets, a modest pickup in the US Dollar demand, supported by rebounding US Treasury bond yields, helped to offset early weakness led by concerns over a probe into possible Russian meddling in the 2016 US election.

However, speculations that the US President Donald Trump is leaning towards Jerome Powell (less hawkish) as the next Fed Chair, coupled with the prevalent cautious environment, which tends to underpin the Japanese Yen's safe-haven appeal, might keep a lid on any strong follow-through momentum for the pair. 

Later during the day, the US economic data - Employment Cost Index, Chicago PMI and Conference Board's Consumer Confidence Index, would now be looked upon to grab some short-term trading impetus. 

The key focus, however, would remain on this week's major events, including the FOMC decision and the keenly watched NFP report, which would now play a major role in determining the pair's near-term trajectory.

Technical levels to watch

Immediate resistance is pegged near 113.40 level, above which the pair is likely to dart back towards reclaiming the 114.00 handle before eventually heading towards its next major hurdle near the 114.45-50 region.

On the downside, the 113.00 handle now becomes an immediate support to defend, which if broken should accelerate the fall towards 112.85-80 strong horizontal support en-route the 112.30-25 region.