USD/JPY regains upside momentum and approaches the 146.00 level

• The Greenback's recovery accelerates as market sentiment fades. 
• The Yen is on the defensive on hopes that the BoJ will keep its ultra-loose policy unchanged.
• Markets are calm today with US markets closed on bank holiday. 

The US Dollar bounced higher on Monday, favoured by sourer market sentiment and a weaker Japanese Yen. The pair has regained most of the ground lost on Friday and reaching Intra-day highs nearing 146.00.

The Greenback seems to have shrugged off the post-US PPI weakness in a calm trading session, with US markets closed for the Martin Luther King birthday.

With the Bank of Japan monetary policy meeting approaching, the weak Tokyo CPI index and wage data seen last week have practically discarded any monetary policy normalization in January’s meeting. This is likely to keep the Yemn on the defensive this week.

The calendar is light today with only the NY Empire State Manufacturing Index. The Highlight in the US calendar will be the Retail Sales release on Wednesday. In Japan, all eyes are on the National CPI data due on Thursday. The risk of this event is negative for the Yen.

Technical indicators are pointing higher, with bulls aiming for Thursday’s high at 146.40 ahead of 147.45. Immediate support is at 144.35 and then 143.55.

Technical levels to watch