USD/JPY up-little, around 109.40 level

   •  USD underpinned by a goodish pickup in the US bond yields.
   •  Fading safe-haven demand offsets stronger Japanese PMI.
   •  Traders eye US ISM PMI for some impetus ahead of the Fed.

The USD/JPY pair built on its steady climb from the 109.00 handle and inched back closer to previous session's swing highs. 

The US Dollar held on to its modest gains near multi-month tops, further supported by a goodish pickup in the US Treasury bond yields, and was seen as one of the key factors behind the pair modest uptick through the Asian session on Tuesday. 

This coupled with fading safe-haven demand, which largely offset an upward revision of the Japanese manufacturing PMI, remains supportive of the mildly positive tone for the second consecutive session. 

The up-move, however, seemed lacking any strong follow-through traction amid holiday-thinned liquidity conditions and investors' reluctance to place aggressive bets ahead of this week's highly anticipated FOMC meeting and the keenly watched US NFP report. 

Ahead of the key event risks, the release of US ISM manufacturing PMI, scheduled for release later during the early NA session, would now be looked upon for some short-term trading opportunities.

Technical levels to watch

The 109.50-55 area might continue to act as an immediate resistance, above which the pair seems all set to aim towards reclaiming the key 110.00 psychological mark and head towards challenging the very important 200-day SMA barrier near the 110.20-25 region. 

On the flip side, the 109.00 handle now seems to have emerged as an immediate strong support, which if broken might prompt some aggressive long-unwinding trade and drag the pair towards 108.40 intermediate support en-route the 108.00 round figure mark.