USD/JPY extends the break beyond 111 amid notable USD demand

The USD/JPY pair catches fresh bids over the last hour, finally taking the rate through 111 handle, as the bulls continue recovering ground from two-week troughs of 110.64.

USD/JPY regains 111 handle, what next?

Amid resurgent US dollar buying across the board, the recovery in USD/JPY gained extra traction, sending the prices further into the green zone in an attempt to test 5-DMA located at 111.17.

The greenback tracked the US yields higher, in the wake of improving risk sentiment after China factories saw steady growth.

A better risk sentiment prompted the yen sellers to return, with markets looking past solid Japanese industrial production numbers. Japan's industrial production hits highest level since 2008

The major now awaits the sentiment on the European open for fresh incentives, while the US dataflow will also provide some trading impetus later in the NA session.

USD/JPY Technical levels                 

Jim Langlands at FX Charts noted: “On the topside, 111.00 will act as a pivot ahead of the session high of 111.30. Above this currently looks unlikely, but if wrong, minor levels would then lie at 111.45 and 111.85. Selling rallies, with a SL placed above 111.30, but looking for a move towards 110.00 is favoured.”