USD/JPY clings to strong recovery gains near mid-112.00s

   •  Improving risk sentiment weighs on JPY and helps gain positive traction.
   •  Renewed pickup in the US bond yields underpin USD and remains supportive.

The USD/JPY pair reversed an early dip to the 112.00 handle and has now moved within striking distance of overnight swing high.

Despite Thursday's follow-through sell-off in the US equity markets, the pair showed resilience below the 112.00 handle and managed to register a goodish recovery from near one-month lows, set in the previous session. 

A goodish recovery in the risk sentiment, as depicted by initial signs of stability in global equity markets, undermined the Japanese Yen's safe-haven status and assisted the pair to gain some positive traction on the last trading day of the week. 

The pair now seems to have snapped six consecutive days of losing streak and was further supported by easing US Dollar bearish pressure. With investors looking past Thursday's softer US consumer inflation figures, some renewed pickup in the US Treasury bond yields turned out to be one of the key factors lending some support to the greenback. 

It, however, remains to be seen if the pair is able to build on the positive momentum or once again meets with some fresh supply at higher levels, especially after the US President Donald Trump's criticism over the pace of Fed rate hikes. 

Later during the early North-American session, the US economic docket, featuring the release of Prelim UoM Consumer Sentiment, will now be looked upon for some short-term trading opportunities. 

Technical levels to watch

The 112.55-60 region might continue to act as an immediate resistance, above which the pair is likely to aim towards reclaiming the 113.00 round figure mark. On the flip side, the 112.15 level, closely followed by the 112.00 handle and the 111.85-80 region now seems to protect the immediate downside, which if broken is likely to accelerate the fall towards 100-day SMA support near the 111.30-25 region.