Some positive housing data out of the US supported the greenback as existing home sales came in much better than expected. USD/JPY caught a bit of a tailwind from the whole situation and finally came off its base in the ¥122.50 region.
A disappointing flash manufacturing PMI out of Japan today also helped the situation as it caused some yen weakness. USD/JPY had a great run after finding support in May from around the ¥119.00 region and managed to climb to within striking distance of ¥126.00.
Unfortunately, the rally stalled in that region and the pair has come under pressure. This resulted in some consolidation around the ¥123.00 region. It now seems traders are keen to get involved in the pair again as it finds support from the 38.2% retracement of the recent rally.
The next resistance is in the ¥124.25 region, which is the 23.6% retracement of that move. A move above this resistance could see the pair challenge ¥125.90. On the calendar today we have durable goods orders due.