USD/JPY extends recovery momentum to 100.80

Having posted a session low near 100.00 psychological mark, the USD/JPY pair has managed to recover around 70-pips to currently trade around 100.80-85 band. 

Comments from Japanese Ministry of Finance (MOF) official, Asakawa, to take action in order to prevent speculative moves in the Japanese Yen, triggered the initial leg of recovery for the major. In absence of any further fundamental development, the current bounce could be attributed to short-covering from an important support near 100.00 psychological mark.

Adding to this, the prevalent risk-on sentiment is driving investors away from perceived safe-haven assets and denting demand for the Japanese Yen, thus contributing to the major’s recovery from near-term oversold conditions.

Later during the day, US economic releases - weekly jobless claims and existing home sales data, would be looked upon for fresh impetus for the next leg of move for the major.

Technical levels to watch

A follow through buying interest above 101.00 handle is likely to lift the pair further towards a horizontal support break turned resistance near 101.40 region. Meanwhile on the downside, renewed weakness below 100.30-25 immediate support might now force the pair to break through 100.00 handle and head towards testing August monthly lows support near 99.55-50 area.