USD/JPY trades with modest losses, around mid-111.00s

   •  Global trade tensions continue to underpin JPY and capped gains.
   •  A follow-through USD buying helps limit immediate sharp downside. 
   •  Traders now eye US PPI print for some short-term opportunities.

The USD/JPY pair was seen consolidating overnight strong gains to near one-week tops and traded with a mild negative bias through the Asian session on Wednesday.

The pair found some fresh buying ahead of the 111.00 handle on Tuesday and was supported by a combination of positive factors. Renewed US Dollar demand, coupled with surging US Treasury bond yields and positive mood around the US equity markets pushed the pair beyond mid-111.00s.

However, escalating global trade worries kept investors on edge and kept a lid on any further up-move, at least for the time being. The risk-off mood was evident from the ongoing fall in Asian stocks, which benefitted the Japanese Yen's safe-haven status and exerted some downward pressure on Wednesday.

Meanwhile, a follow-through buying seen around the greenback continued extending some support. This coupled with today's disappointing release of BSI Manufacturing Index from Japan further collaborated towards limiting any immediate sharp downside, albeit a softer tone around the US bond yields failed to provide any fresh bullish impetus. 

Moving ahead, today's release of the US PPI print will now be looked upon for some short-term trading opportunities later during the early North-American session. The key focus, however, would be on this week's other important US macro data - Thursday's consumer inflation figures and monthly retail sales data on Friday, which should help investors determine the pair's next leg of directional move.

Technical levels to watch

Immediate resistance is pegged near the 111.70-75 region, above which the pair seems all set to reclaim the 112.00 handle and test 112.15-20 supply zone. On the flip side, any meaningful retracement is likely to attract some buying near the 111.35-30 region and is followed by a strong support near the 111.00 handle.