•  General USD demand prevails at the start of a new week. 
   •  Fading safe-haven demand provides an additional boost. 
   •  This week’s FOMC minutes to provide fresh directional impetus.

The USD/JPY pair continued gaining some positive traction through the early European session and is currently placed at session tops, around 106.60-65 band.

The pair built on its steady climb for the second consecutive session, recovering over 100-pips from Friday's 15-month low level of 105.55, and was being supported by a modest pickup in the US Dollar demand. 

The incoming US economic data, pointing to prospects about rising inflationary pressure, has been fueling expectations for a possible four Fed rate hike moves in 2018 and eventually extending some support to the greenback. 

Adding to this, a mildly positive trading sentiment around European equity markets, pointing to improving investor's appetite for riskier assets, was further seen denting the Japanese Yen's safe-haven appeal and remained supportive of the up-move. 

Meanwhile, thin liquidity conditions,  on the back of a holiday in the US in observance of President's Day, could lead to some volatility within a narrow trading range. Moving ahead, this week's important release of the FOMC meeting minutes might now play an important role in determining the pair's next leg of directional move. 

Technical levels to watch

A follow-through recovery move is likely to confront immediate resistance near the 107.00 handle, above which a fresh bout of short-covering might lift the pair beyond mid-107.00s towards reclaiming the 108.00 round figure mark.

On the flip side, 106.30-25 area now seems to protect the immediate downside, which if broken might negate prospects for any further recovery and drag the pair back below the 106.00 handle towards retesting multi-month lows support near the 105.60-55 region.