USD/JPY bulls eyeing a follow-through momentum beyond 113.00 handle

   •  Passage of the US tax bill provides a minor boost to the USD.
   •  Surging US bond yields/risk-on mood supportive of the up-move.
   •  Bulls seemed lacking conviction ahead of this week’s key event risk/data. 

The USD/JPY pair traded with a mild positive bias for the second straight session but seemed lacking any follow-through momentum beyond the 113.00 handle.

The US Dollar gained some positive traction on news that the US Senate has approved the Republican tax legislation and the bill would now be sent back to the House for the final vote. 

The passage of a much-awaited tax package has been fueling expectations of additional US bond issuance and driving the US Treasury bond yields higher, which eventually provided an additional boost to pair's ongoing recovery move.

Adding to this, a fresh wave of global risk-on trade was also seen weighing on the Japanese Yen's safe-haven appeal and remained supportive of the pair's modest uptick on Tuesday.

Additional gains, however, remained limited as investors held back from placing aggressive bets and now look forward to Thursday's BOJ monetary decision, which along with this week's important US macro data would help determine the next leg of directional move. 

Technical levels to watch

A strong follow-through buying interest has the potential to continue boosting the pair towards 113.55-60 supply zone, above which bulls might aim towards reclaiming the 114.00 handle.

On the flip side, 112.80 level now seems to protect the immediate downside, which if broken could accelerate the fall back towards 112.40-35 intermediate support en-route the 112.00 handle.