USD/JPY breaches 112.50 support amid US political disarray

USD/JPY failed several attempts to take on the recovery above 112.70 levels in the Asian session, now pushing the rate to print fresh eight-day troughs of 112.43.

USD/JPY sold-off into risk-off

The sellers remain in command as the US dollar continues to weakness amid renewed political uncertainty surrounding the US President Trump over his disclosure of classified information to Russia and Comey memo.

Moreover, amid the US political disarray, investors turn cautious and seek safety in the safe-haven yen, exacerbating the pain in USD/JPY. Risk-off persists at full steam in Asia, with the Nikkei 225 down -0.53%, while treasury yields slump -1% to -1.50% across the curve.

Adding to the weakness in the spot, the recent soft patch of US economic data dampened expectations of June Fed rate hike, which also continues to weigh on the US yields. Meanwhile, negative oil prices further add to the risk-off moods and drag the major lower in a bid to test 112 handle ahead of a data-quiet US docket today.

USD/JPY Technical levels                 

A break above 113.20/27 (5-DMA/ daily pivot) would expose 113.50 (psychological levels) and 113.86 (May 15 high). On the other hand, a breach of support at 112.34 (100-DMA) could yield a test of 112 (key support) and 111.29/21 (200 & 50-DMA).