USD/JPY clings to strong recovery gains near mid-111.00s

   •  A modest USD recovery prompts short-covering. 
   •  Fading safe-haven demand lends additional support. 
   •  Ignores upbeat Japanese manufacturing PMI print.

Having defended the 111.00 handle in the previous session, the USD/JPY pair caught some strong bids and staged a goodish recovery move this Friday.

The FOMC minutes-led US Dollar selling pressure has now abated and prompted some short-covering on the last trading day of the week. Adding to this, a mildly positive trading sentiment around Asian equity markets, which tends to weigh on the Japanese Yen's safe-haven appeal, further collaborated to the pair's strong recovery move to mid-111.00s.

Meanwhile, the market seems to have largely ignored today's upbeat release of Japanese manufacturing PMI for November, with the USD price-dynamics and improving market risk sentiment turning out to be key determinants of the pair's bullish momentum. 

Today's US economic docket, featuring the release of flash manufacturing and services PMI releases will wrap up a holiday-shortened week but is unlikely to have any major impact on the market movement. 

Technical levels to watch

Momentum beyond 111.70 immediate hurdle could get extended towards the 112.00 handle en-route 112.15 horizontal resistance. On the flip side, 111.20 level now becomes an immediate support to defend and is closely followed by the 111.00 handle, which if broken now seems to pave way for extension of the pair's near-term depreciating move.