USD/JPY sticks to modest daily gains, just above mid-111.00s

   •  A follow-through USD up-move helps regain positive traction.
   •  Risk-off mood underpins JPY and caps any meaningful up-move.

The USD/JPY pair held on its mildly positive tone through the early European session, albeit remained below weekly tops touched during the Asian session.

After a brief pause, the US Dollar regained positive traction on Wednesday and was seen as one of the key factors assisting the pair to build on overnight strong up-move from sub-111.00 level.

The pair touched an intraday high level of 111.71 but lacked any strong follow-through amid the prevalent risk-off mood, which was seen underpinning the Japanese Yen's safe-haven demand.

The global flight to safety was further reinforced by the ongoing slide in the US Treasury bond yields, which further collaborated towards capping any runaway rally, at least for the time being.

Today's US economic docket lacks any major market-moving economic releases and hence, the broader market risk sentiment/USD price dynamics might continue to play a key role in influencing the price action through Wednesday's trading session.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: “The pair will likely find acceptance above 111.83 (Aug. 29 high) and that would open up upside towards 113.18 (July 19 high).”

“On the downside, a close below the ascending trendline would abort the bullish view. Only a daily close below the 200-day moving average (MA) of 109.80 would revive the bearish view,” he adds further.