USD/JPY hits 3-week tops, 113.00 mark a whisker away

   •  Resurgent USD demand helps build on Friday’s rebound from 6-week lows.
   •  Positive US bond yields/stability in equity markets supportive of the up-move.
   •  Traders now eye US consumer confidence index for some impetus ahead of BoJ.

The USD/JPY pair maintained its strong bid tone through the mid-European session and climbed to near three-week tops in the last hour. 

The pair built on Friday's goodish rebound from six-week tops and continued gaining positive traction for the second consecutive session, unaffected by renewed worries about an escalation of the US-China trade war. 

An overnight report that the Trump administration was preparing to impose tariffs on all Chinese imports if there is no progress made before November summit was largely offset by the US President Donald Trump's comments, predicting a "great deal" with China on trade.

Meanwhile, a modest uptick in the US Treasury bond yields lifted the US Dollar to 2-1/2 month tops on Tuesday and turned out to be one of the key factors driving the pair higher, with bulls now eyeing a move towards reclaiming the 113.00 handle. 

Adding to this, signs of stability in European equity markets, and indications of a positive opening across the US bourses further weighed on the Japanese Yen's safe-haven status and remained supportive of the ongoing strong positive momentum.

Moving ahead, today's relatively thin US economic docket, highlighting the release of Conference Board's consumer confidence index will be looked upon for some short-term trading impetus ahead of the latest BoJ monetary policy update on Wednesday.

Technical levels to watch

Momentum beyond the 113.00 handle is likely to get extended towards the 113.20-25 intermediate resistance en-route the 113.65-70 supply zone and the 114.00 handle. On the flip side, the 112.65 level now seems to protect the immediate downside and is followed by support near the 112.35 region, which if broken might turn the pair vulnerable to head back towards challenging the 112.00 handle.