USD/JPY inter-markets: a brief pause before the next leg of up-move

The USD/JPY pair consolidated strong weekly gains near 3-month high and has been confined within a narrow trading band above 105.00 handle.

Currently trading around 105.20-25 band, the pair failed to attract follow through buying interest, despite of upbeat US GDP print, which reaffirmed market expectations that the Fed would eventual raise interest-rates at its meeting in December and is further supported by steady rise in the US 10-year Treasury bond yields.

Meanwhile, the recent up-tick in the Japanese government bond yields and downward consolidating in the Volatility Index (VIX) are further reinforcing easing risk-aversion and has been supportive of the pair's ongoing bullish momentum. 

Spot prices, however, seem to ignore the intrinsic and are retracing from multi-month highs. The current pull-back could be attributed to profit-taking following the pair's relentless up-move of nearly 250-pips from last week's low near 103.15 region. Hence, any further corrective slide towards 105.00 psychological mark might now be seen as an opportunity to initiate fresh long positions, given that the intrinsic still pointing to further upside from current levels.