The grind higher comes amid a more positive risk backdrop as omicron fears are cast aside temporarily. That is also allowing for higher Treasury yields, further buoying yen pairs in general.

Scant data continues to reveal that omicron may be more transmissible than delta but is perhaps less severe. The risk though still lies with those that are not vaccinated, so that is a spot to watch. Adding to that is lockdown risks posed by the likes of China, who adopt a zero-COVID policy approach.

As much as markets may be optimistic now, I fear less than ideal vaccine efficacy news in the next week could still hurt sentiment. That said, expect vaccine makers to reassure that they can get out a solution in a matter of "months". That may present a case for dip buying if and when the barrage of headlines come through.

Going back to USD/JPY, price action so far this week has been encouraging for buyers. The near-term bias is siding with them now but I still see upside momentum capped closer to 114.00. Meanwhile, downside pressure is also limited closer to support @ 112.60-72.

USDJPY H1 07-12

That highlights a rather well-defined range for the pair to play around with at the moment.

A push back above 114.00 opens up the path for buyers to try and erase the 26 November drop. However, as mentioned above, how sustainable that might be will depend on virus developments.

For now, the market is running with the notion that no news is good news. But we'll see how things go in the days/weeks ahead.

Besides that, keep a watchful eye on the bond market as the 10-year Treasury yields chart is getting interesting: