USD/JPY rebounds to 104.00 as Nikkei hits fresh highs

A renewed bout of risk-on wave gripped the markets after the Chinese services PMI bettered expectations, providing extra legs to the rebound in the USD/JPY pair from 103.70 region.

USD/JPY re-takes 104 handle

The dollar-yen pair staged a solid comeback after having heavily offered at Tokyo-open, as the Japanese traders solid-off the major in a negative reaction to the poor US jobs data.

However, the major managed to quickly recover ground and swung back higher to 104 barrier as a better-than expected Chinese services PMI report further fuelled risk-on trades and boosted the demand for risky assets (equities) at the expense of safe-havens such as the yen.

At the time of writing, USD/JPY trades 0.09% higher at 104.00, while the Nikkei 225 jumps +1.30% to 17,150 levels.

With the US NFP data out of the way, the immediate focus now remains on scheduled speech from BOJ Governor Kuroda amid holiday-thinned markets.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 104.61 (100-DMA). A break above the last, the major could test 105 (psychological levels). While to the downside, the immediate support is seen at 103.72 (5-DMA) and below that at 103.50 (round number).