The USD/JPY pair, for now, seems to have snapped five consecutive days of the winning streak. The pullback could be attributed to some profit-taking amid slightly overbought conditions on short-term charts. Bearish traders further took cues from a softer tone surrounding the US Treasury bond yields.
That said, a combination of factors held bearish traders from placing aggressive bets and assisted the USD/JPY pair to attract some dip-buying near the 105.85 zone. The US dollar added the overnight solid recovery move gains from three-week tops and is likely to extend some support to the major.
Apart from this, the optimism over a strong global economic recovery – amid the progress on COVID-19 vaccine rollouts – might continue to undermine demand for the safe-haven Japanese yen. This, in turn, should further contribute to limit any meaningful corrective slide for the USD/JPY pair.
USD/JPY pulled back from five-month highs of 106.22, now consolidating around 106.00, as the bulls gather pace for the next leg higher.