USD/JPY gains fresh traction, taps 118.00 handle

A fresh wave of greenback buying interest emerged during early European session, lifting the USD/JPY pair back to 118.00 handle.

Today's upbeat Chinese manufacturing PMI helped improve investor risk-appetite and provided the initial boost to the pair's up-move from session low near 117.20 level. Risk-on mood tends to drive flows away from traditional safe-haven assets and was seen weighing on the Japanese Yen. 

Meanwhile, resurgent US Dollar strength helped the pair to gain further traction and accelerate the up-move in the past hour or so. 

Manufacturing data would continue to grab attention on Tuesday, with the scheduled release of US ISM manufacturing PMI for December expected to provide some impetus during early NA session. 

Technical levels to watch

Immediate resistance on the upside is pegged near 118.20 region above which the pair is likely to dart back towards multi-month high resistance near 118.65 region before attempting a move towards reclaiming 119.00 handle. On the flip side, weakness back 117.40 immediate support might continue to find support near 117.00 handle, which if broken could accelerate the fall back towards 116.30-25 support area.