USD/JPY pares early losses, defends 112.00 handle for the time being

The USD/JPY pair extended previous session retracement from 113.00 handle and maintained its offered tone for the second consecutive session. The pair, however, has managed to bounce from 112.00 neighborhood and is currently trading around 112.30-35 band. 

Market now seems to look beyond the perceived hawkish Fed monetary policy statement and renewed greenback selling pressure, with the key US Dollar Index sinking to fresh yearly lows on Thursday, failed to assist the pair to prolong its ongoing recovery move further beyond the 113.00 handle. 

Additionally, a fresh wave of global risk-off trade, as depicted by weaker trading sentiment around global equity markets and reaffirmed by a sharp retracement in the US treasury bond yields, provided an additional boost to the Japanese Yen's safe-haven appeal and further collaborated to the pair's reversal move from the highest level since mid-March.

Later during the NA session, the keenly watched non-farm payrolls data from the US would provide fresh impetus for the pair's next leg of directional move. In the meantime, broader market risk-sentiment would remain a key determinant of the pair's movement on the last trading day of the week.

Technical levels to watch

Immediate resistance is pegged near 112.45-50 area, above which the pair could aim to clearing an intermediate hurdle near 112.75 level and make a fresh attempt to reclaim the 113.00 handle. On the downside, a follow through retracement below 112.10-112.00 immediate support could accelerate the slide towards 111.80 horizontal support ahead of its next support near 111.25 level.