USD/JPY sticks to gains above 111.00 handle

The USD/JPY pair was seen consolidating a bullish opening gap and held firm above the 111.00 handle, within striking distance of seven week highs touched on Friday. 

With investors looking past Friday's disappointing US monthly retail sales data, the US Dollar remained underpinned by the recent rise in the US Treasury bond yields. 

This coupled with fading safe-haven demand, amid continuous improvement in investors' risk appetite was also seen weighing on the Japanese Yen and further collaborated to the pair's strong bid tone through Asian trading session. 

With an empty US economic docket, broader market risk sentiment and the US bond yield dynamics would remain key determinants of the pair's movement at the start of a new trading week.

Looking ahead, central banks would remain in focus through this week, with both the Fed and BoJ scheduled to announce their latest monetary policy decisions on Wednesday and Thursday respectively. 

Technical levels to watch

A follow through bullish move beyond 111.35 level could get extended towards 111.90 area before the pair eventually darts towards testing the very important 200-day SMA hurdle near the 112.25 region.

On the flip side, any retracement below the 111.00 handle now seems to find immediate support near 110.70-65 zone, below which the pair could drift back towards the key 110.00 psychological mark.