USD/JPY recaptures 113.50 as S&P 500 futures open higher

• USD/JPY regains 113.50 amid improving market mood.
• US dollar consolidates post-inflation losses, with eyes on the Fed.
• Impending bear cross and bearish RSI to limit USD/JPY’s advances.

USD/JPY is trading better bid on the Tokyo open, having regained 113.50, finding support from an improvement in the market sentiment.

The positive open on the S&P 500 futures helps the bulls recover some ground in early dealings after a flat close on Friday.

The downbeat Japanese Tankan Large Manufacturing Index for the fourth quarter weighs on the yen, collaborating with the upside in the major.

The in-line with expectations US inflation data on Friday poured cold water on aggressive Fed rate hike expectations, which weighed on the Treasury yields alongside the US dollar, pressurizing USD/JPY towards 113.00.

On the other hand, the record rally in the US stocks amid easing fears over the new Omicron covid variant cushioned the downside in the spot.

All eyes remain on the Fed monetary policy decision for fresh hints on a potential 2022 rate hike, which will eventually impact the yields and the USD/JPY pair.

In the meantime, the Omicron updates and broader market sentiment will lead the way.

USD/JPY: Technical levels to consider