USD/JPY sits near two-month highs, beyond 114.00 handle

The USD/JPY pair built on Friday's up-move and touched a fresh two-month high level near the 114.20 region.

Friday's mixed US monthly jobs report suggested the Federal Reserve would stick to its monetary policy tightening plans for the rest of 2017 continued lending some support to the US Dollar.

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Meanwhile, the Japanese Yen was also weighed down by comments from the BoJ Governor Haruhiko Kuroda on Monday that the central bank would continue with its current mix of monetary policy tools for as long as needed to achieve 2% inflation target. 

Adding to this, a fresh wave of global risk-on trade, as depicted by a positive trading sentiment around equity markets, further dented demand for traditional safe-haven assets, including the Japanese Yen, and collaborated to the pair's up-move to the highest level since May 11.

It, however, remains to be seen if the pair is able to build on the up-move amid a mildly softer tone around the US Treasury bond yields as traders now look forward to today's only release of Labor Market Conditions Index from the US, due later during the NY session.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: "Technical pullbacks are likely to be short lived, given the dovish BoJ and the upward sloping 5-DMA and 10-DMA. Only two consecutive daily close below 10-DMA would signal the top has been made. Consolidation looks likely, while bullish move is seen gathering pace again if the spot ends with the day above the May high of 114.36."