USD/JPY: Yen makes solid comeback on Japanese trade surplus

The USD/JPY pair faced rejection at 114 handle and returned to the red zone after the yen regained bullish momentum on upbeat Japanese trade data.

Japan swung back into trade surplus for the first time in six years in 2016, registering a surplus of JPY 4.074 trillion from a JPY 2.792 trillion deficit.

The spot was last seen exchanging hands at 113.54, recovering from a dip to session lows of 113.39, still down -0.23% on the day. The major remains on the offers amid weaker treasury yields and a less favorable sentiment towards the US dollar, as market continue to cheer auspicious data out of Japan.

However, the spot is seen attempting a minor-recovery, in response to strong gains seen on the Japanese stocks, which boosts risk-on flows and helps keep downside cushioned.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 113.70 (5-DMA). A break above the last, the major could test 113.92 (10-DMA) and 114.50 (psychological levels) beyond the last. While to the downside, the immediate support is seen at 112.89 (daily S1) next at 112.53 (weekly low) and below that at 112 (round figure).