The USD/JPY pair builds on Friday's goodish recovery from the 129.65 area, or its lowest level since February 03 and gains some follow-through traction on the first day of a new week. The positive momentum remains uninterrupted through the first half of the European session and lifts spot prices to a fresh daily high, around the mid-131.00s in the last hour.

A generally positive tone around the equity markets undermines the safe-haven Japanese Yen (JPY), which, in turn, is seen as a key factor acting as a tailwind for the USD/JPY pair. News that First Citizens Bank & Trust Company will buy all of Silicon Valley Bank's deposits and loans from the Federal Deposit Insurance Corporation (FDIC) calm market nerves about the contagion risk. Moreover, reports that US authorities were in the early stage of deliberation about expanding emergency lending facilities boost investors' appetite for perceived riskier assets.

The risk-on flow, along with easing fears of a full-blown banking crisis, lead to a further rally in the US Treasury bond yields. This results in the widening of the US-Japan rate differential, which is seen as another factor weighing on the JPY and providing an additional boost to the USD/JPY pair. That said, the Federal Reserve's signal that it might soon pause the rate-hiking cycle in the wake of the recent turmoil in the banking sector holds back the US Dollar (USD) bulls from placing fresh bets. This, in turn, might keep a lid on any meaningful appreciating move for the major.

It is worth recalling that the US central bank raised interest rates by 25 bps on Wednesday, as was widely anticipated, though sounded cautious on outlook. Apart from this, expectations that the Bank of Japan (BoJ) will tweak its bond yield control policy and whittle down its massive stimulus under new Governor Kazuo Ueda might contribute to capping gains for the USD/JPY pair. This makes it prudent to wait for some follow-through buying before confirming that the recent rejection slide from a technically significant 200-day Simple Moving Average (SMA) has run its course.