USD/JPY consolidating near multi-week tops ahead of NFP

The USD/JPY pair maintained its strong bid tone above the key 115.00 mark, albeit has failed to extend the strong up-surge to seven-week tops near mid-115.00s.

Currently trading around 115.35-40 region, the pair oscillated within a narrow trading band as market participants turned cautious ahead of the keenly watched US non-farm payrolls data. Heading into the key event risk, a modest greenback retracement has failed to assist the pair build on early up-move. In fact, the key US Dollar Index extended the pull-back further below the 102.00 handle and dropped to daily lows near 101.80 region during mid-European session. 

Meanwhile, a positive trading sentiment around European equity markets, which tends to dent the Japanese Yen's safe-haven appeal, has been supportive of the pair's strong bid tone closer to the highest level since Jan. 19.

Moreover, the ongoing up-surge in the US treasury bond yields continues to underpin the greenback demand, against its Japanese counterpart, and is also helping the pair to hold on to its strong gains led by the disappointing release of Japanese Business Survey Index. 

Today's NFP data, slated for release during early NA session, would now act as a catalyst for the pair's movement in the near-term ahead of the FOMC meeting next week.

US: NFP report to be scrutinised intensively following Fed hike speculation – Danske Bank

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet notes, "an upside break in the RSI suggests the spot is on track to test 116.12 (Dec 12 high). A daily close above the same would open doors for a revisit to 118.66 (yearly highs). On the downside, only a daily close below 50-DMA seen today at 114.02 would abort bullish view."