USD/JPY hits fresh multi-week highs, beyond mid-113.00s ahead of FOMC minutes

The USD/JPY pair continued gaining traction through European trading session and has now jumped to a fresh 1-1/2 month high beyond mid-113.00s.

A fresh wave of US Dollar buying interest helped the pair to build on its up-move from daily lows near 112.80 region, touched in reaction to rising geopolitical tensions in the Korean peninsula. Moreover, stability in European equity markets was also seen weighing on the Japanese Yen's safe-haven appeal and drove the pair to its highest level since May 16, around 113.65-70 band. 

Heading into the key event risk - FOMC minutes, traders seemed inclined to lighten their bearish USD bets. Adding to this, possibilities of some stops being triggered on a decisive break above a short-term descending trendline resistance near 112.30 region further collaborated to the pair's strong up-move since early European session.

Today's US economic docket features the release of factory orders, which is unlikely to provide any catalyst for short-term traders. Hence, broader market risk sentiment and the USD price dynamics would continue to be key determinants of the pair's movement ahead of the FOMC meeting minutes.

   •  JPY to continue depreciating against the USD – Nomura

Technical levels to watch

A follow through momentum beyond 113.80 level is likely to get extended towards the 114.00 handle en-route May monthly highs resistance near 114.35-40 region. On the downside, the descending trend-line resistance break-point near 112.35-30 region now seems to act as immediate support, which if broken could drag the pair back below the 113.00 handle towards retesting 112.80-75 zone.