USD/JPY consolidates near 1-1/2 week tops, above mid-113.00s

   •  A fresh wave of risk-aversion trade underpins JPY’s safe-haven demand.
   •  The prevalent USD buying interest helped limit any immediate downside.
   •  Clarida’s hawkish comments remained supportive of the USD bid tone.
 
The USD/JPY pair lacked any firm directional bias and seesawed between tepid gains/minor losses, just below 1-1/2 week tops touched earlier today.

A combination of diverging forces failed to provide any fresh bullish impetus/assist the pair to build on its overnight strong up-move and led to a subdued/range-bound price action through the early North-American session on Tuesday.

Market sentiment took a hit after the US President Donald Trump threatened to move ahead with raising tariffs on $200 billion in Chinese imports to 25% from the current 10% and prompted a fresh wave of global risk aversion trade.

The risk-off mood was evident from a modest retracement in the US Treasury bond yields, which was seen underpinning the Japanese Yen's safe-haven status and eventually turned out to be one of the key factors capping any meaningful up-move for the major.

The downside, however, remained cushioned amid the prevailing bullish sentiment surrounding the US Dollar, which remained supported by some hawkish comments by the Fed Vice Chairman Richard Clarida, saying that he would back more hikes than expected if inflation surprised to the upside.

Currently hovering around the 113.60-65 region, market participants now look forward to the release of Conference Board's consumer confidence index, a key highlight from today's relatively thin US economic docket, in order to grab some meaningful trading opportunities.

Technical levels to watch

Any subsequent up-move is likely to confront immediate resistance near the 113.80 level, above which the pair is likely to aim towards surpassing the 114.00 round figure mark. On the flip side, the 113.45-40 region seems to protect the immediate downside, which if broken might turn the pair vulnerable to head back towards retesting the 113.00 round figure mark.