USD/JPY off lows, still weaker below 114.00 handle

   •  Fed Chair speculations prompt some long unwinding.
   •  Risk-off mood/weaker US bond yields adding to the selling pressure.
   •  US tax reform bill and Fed Chair announcement in focus. 

The USD/JPY pair came under some fresh selling pressure on Thursday and eroded a significant part of its strong overnight gains back above the 114.00 handle. 

Increasing likelihood of the current Fed Governor Jerome Powell being nominated as the next Fed chair was seen weighing a bit on the US Dollar and prompted some long unwinding trade since the early Asian session on Thursday. 

   •  Forex Today: USD slumps in Asia

Adding to this, a fresh wave of global risk-aversion, reinforced by sliding US Treasury bond yields, provided an additional boost to the Japanese Yen's safe-haven appeal and further collaborated to the pair's retracement.

   •  US futures drop on temporary corporate tax cuts news

However, firming expectations for December Fed rate hike action and Wednesday's stronger ADP report, signaling strengthening labor market, helped limit deeper losses, at least for the time being. 

Thursday's key focus would be on the legislation over the long-awaited US tax-cut plans and the US President Donald Trump's announcement over the next Fed Chair, which along with Friday's NFP would determine the pair's next leg of directional move.

Technical levels to watch

The 113.70 region now seems to have emerged as immediate support, which if broken could accelerate the slide back towards 113.20 horizontal support ahead of the 113.00 handle.

On the upside, any move beyond the 114.00 handle is likely to confront some resistance near 114.15-20 area, above which the pair is likely to dart towards its next major hurdle near the 114.45-50 region.