USD/JPY struggling near mid-112.00s amid notable USD weakness

   •  Renewed USD weakness helps offset fading safe-haven demand.
   •  Surging US bond yields seemed lending some support. 
   •  This week’s US macro data & BoJ awaited for fresh directional impetus.

The USD/JPY pair finally broke down of its late Asian/early European session consolidation phase and has now retreated back to the mid-112.00s.

The pair stalled its 50-pips rebound from session low level of 112.31 and was being weighed down by persistent US Dollar selling bias, despite the latest optimistic news over the long-awaited tax reform bill.

Meanwhile, a goodish uptick in the US Treasury bond yields, coupled with the prevalent risk-on environment, which tends to dent the Japanese Yen's safe-haven appeal, helped limit deeper losses, at least for the time being.

The pair's good two-way move, within a broader trading range over the past three sessions now seems to suggest traders’ indecision. Hence, this week's important US macro data, along with the BoJ monetary policy decision would play a crucial role in determining the pair’s next leg of directional move. 

Technical levels to watch

A follow-through weakness below 112.30 level might now turn the pair vulnerable to break below the 112.00 handle and aim towards testing the very important 200-day SMA support near the 111.65-60 region.

On the flip side, 112.80-85 zone now seems to have emerged as an immediate hurdle, above which the momentum could get extended back towards an important supply zone near mid-113.00s.