USD/JPY recovers lost ground, spikes back closer to 114.00 handle

The USD/JPY pair has managed to erase early losses to session low near the 113.60 region and moved back closer to the 114.00 handle.

Growing bets that the Federal Reserve would raise key interest rates at its upcoming monetary policy meeting on March 14-15 has been supportive of the US treasury bond yields' ongoing upward trajectory. A fresh wave of bullish surge in the bond yields revived greenback demand during early European session, lifting the key US Dollar Index back closer to the 102.00 handle and helping the pair to rebound sharply from session lows. 

Moreover, a flat opening in the European equity markets pointed towards improving investors' risk-appetite, resulting into flows moving away from the Japanese Yen's safe-haven appeal and collaborating to the pair's sharp up-move in the past hour or so.

It, however, remains to be seen if the pair is able to build on the recovery move and head back towards the 50-day SMA important hurdle as focus remains on the release of ADP report, due later during the NA session.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet provides important levels to watch for the pair's near-term movement. 

"Bullish scenario: Rebound from the 10-DMA support of 113.39 followed by a break above 114.54 would open doors for 116.12 (Dec 12 high)."

"Bearish scenario: A daily close below 10-DMA - 113.39 could yield a sell-off to 112.22 (100-DMA)."