USD/JPY reverses over 50-pips from fresh 10-month highs

The greenback continues to scale higher, with the USD/JPY pair building on to its strong up-move beyond 118.00 handle to hit fresh 10-month highs. The pair, however, has retraced around 50-pips from multi-month peaks and is currently trading around 118.15 region.

Wednesday's FOMC decision to raise Federal-fund rates by 25 bps points and upgrade its interest-rate outlook for 2017 continues to underpin the greenback, with the overall US Dollar Index surging to fresh 13-year highs in the post-FOMC price-action. Adding to this, the prevalent upbeat sentiment around European equity markets is weighing on the Japanese Yen's safe-haven appeal and also contributing to the major's strong bid-tone for the second straight session.

Investors on Thursday will remain focused on the release of US CPI print, which if reaffirms Fed expectations of inflation moving back closer to the central bank's target range near 2% "over medium term", should attract a follow through buying interest around the major. Traders will also confront the release of Philly Fed Manufacturing Index, and weekly jobless claims. 

Technical levels to watch

Momentum back above 118.50 level now seems to get extended towards 118.80-85 horizontal resistance above which the pair seems all set to aim towards testing 120.00 psychological mark in the near-term. On the downside, weakness below 118.00 round figure mark might trigger some profit-taking slide towards 117.40-35 region below which the pair is likely to head back towards testing 116.00 handle.