USD/JPY sits at fresh weekly tops above mid-111.00s, NFP in focus

The USD/JPY pair built on yesterday's strong up-move and is now placed at fresh weekly tops above mid-111.00s. 

Spot has now recovered over 100-pips from a two-week low touched on Wednesday as bulls finally got a respite for yesterday's blowout ADP report, which might have raised expectations for Friday's official jobs data. Also collaborating to the strong bid tone was a modest improvement in the ISM manufacturing PMI for May, which negated a jump in the US initial weekly jobless claims to five-week highs.

   •  US: ADP employment report poses upside risks to NFP – Nomura

A solid headline NFP print would reaffirm expectations for a June rate-hike action and hence, a follow through up-tick in the US treasury bond yields have been supportive of the strong up-move for the second consecutive day.

Meanwhile, buoyant sentiment around global equity markets, with Japan's Nikkei 225 moving beyond 20K mark for first time since Dec 2015, did little to extend any support to the Japanese Yen's safe-haven appeal and stall the pair's upward trajectory to weekly tops. 

   •  Nikkei tops 20K for the first time since December 2015

Investors' attention on Friday would remain glued to the closely watched US monthly employment details for more guidance on the pair's next leg of directional move.

Technical levels to watch

Immediate resistance is pegged near 111.80-85 region, above which the pair seems all set to surpass the 112.00 handle, and 112.15 intermediate resistance, towards its next major hurdle near 112.45-50 region.

On the flip side, 111.30 level now seems to protect immediate downside, which if broken might drag the pair back below the 111.00 handle towards testing 110.80-75 horizontal support.