USD/JPY retreats from highs, still comfortable above 112.00 handle

   •  US economic data fails to provide any fresh bullish impetus.
   •  Risk-on mood/higher US bond yields lending support.
   •  Focus remains on the fate of US tax reform bill.

The USD/JPY pair held with a strong positive bias through the early NA session but now seemed struggling to build on the bullish rebound further beyond mid-112.00s.

The pair lost some altitude after today's mostly in-line core PCE price index and personal spending data failed to impress the USD bulls. In fact, the key US Dollar Index surrendered modest daily gains and did little to assist the pair to build on its recent recovery move from over two-month lows touched earlier this week.

Meanwhile, the ongoing upsurge in the US Treasury bond yields, reinforcing the prevalent risk-on mood, continued weighing on the Japanese Yen's safe-haven and helped the pair to preserve its gains for the third consecutive session.

Today's US economic docket also features the release of Chicago PMI, which along with Fedspeaks seems unlikely to have any major impact on the pair's momentum.

Investors' attention would remain glued to progress on the highly-anticipated US tax cut bill, with a full Senate vote expected today.

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes, "the 4 hours chart shows that the advance stalled around a bearish 100 SMA, while technical indicators lost upward strength after reaching overbought conditions, still far from suggesting a downward movement ahead. The pair would need to break below 112.00 to turn intraday negative, but it would take discouraging US data and a poor performance in equities and yields to take it below 111.60 and back into the bearish path."