USD/JPY: bulls have eyes for the 111 handle on optimism around USA's economy

Currently, USD/JPY is trading at 110.67, down 0.00% on the day, having posted a daily high at 110.71 and low at 110.54.

A choppy start for Japanese shares while the safe-haven yen remains under pressure having been a big underperformer overnight amid improved risk sentiment. N.Korea tensions have faded into almost no existent and the dollar has been bought up with expectations rising for a rate hike this year on the back of strong retail sales data echoing Fed's Dudley's optimism yesterday. 

Subsequently, US 10yr treasury yields rose from 2.24% to 2.28%, 2yr yields from 1.33% to 1.35% and the  Fed fund futures yields firmed, pricing the chance of a December rate hike at around 47% (from 43%), as noted by analysts at Westpac.  All eyes will now turn to the FOMCminutes tomorrow, where analysts at Nomura have suggested, should shed further light on the inflation debate.

FOMC minutes preview - Nomura  

USD/JPY levels

Meanwhile, Valeria Bednarik, chief analyst at FXStreet explained that the 4 hours chart shows that the price settled around its 100 SMA, while technical indicators are losing upward strength near overbought readings, indicating decreasing buying interest at current levels. "The pair needs to advance beyond 111.05 to be able to resume its advance during the upcoming sessions, and approach then to the 112.00 figure."