USD/JPY clings to strong gains near session tops, just above mid-111.00s

   •  Resurgent USD demand helps quickly reverse trade-related news-led dip.
   •  A sharp recovery in US equities/surging US bond yields remains supportive.

The USD/JPY pair maintained its strong bid tone through the early North-American session, with bulls now trying to build on the positive momentum beyond mid-111.00s.

Reaction to the latest trade-related development turned out to be short-lived, with resurgent US Dollar demand helping the pair to quickly reverse a mid-European session dip and move back to the top end of its daily trading range. 

Meanwhile, today's news that Japanese chipmaker Renesas was buying US counterpart Integrated Device Technology for about $6.7 billion in cash continued weighing on Japan’s currency.

Adding to this, a sudden recovery in risk sentiment, as depicted by a sharp recovery in the US equity markets, further dented the Japanese Yen's safe-haven status and remained supportive of the positive momentum.

Bulls also seemed taking cues from a strong upsurge in the US Treasury bond yields and hence, a follow-through up-move, led by some fresh technical buying beyond the 111.55-60 supply zone, now looks a distinct possibility.

Technical levels to watch

Momentum above the mentioned hurdle is likely to confront resistance near the 111.75 region, above which the pair seems all set to reclaim the 112.00 handle. On the flip side, the 111.35-30 zone now seems to protect the immediate downside and is now followed by a strong support near the 111.00 handle.