USD/JPY plummets to session lows, 112.00 back on sight

The greenback maintained its offered bias, dragging the USD/JPY pair to fresh session lows near 112.25 region during early NA session.

The pair remained heavily offered for the second consecutive day and extended last week's reversal move from near two-month highs around 114.40 region. A fresh wave of global risk-aversion trade, amid escalating political concerns in the world's largest economy, was seen boosting the Japanese Yen's safe-haven appeal. 

The latest news report that the US President Donald Trump had asked then-FBI Director James Comey to drop the investigation into ties between former national security adviser Michael Flynn and Russia, added to the already bearish sentiment surrounding the greenback led by dismal incoming US macro data. In fact, the key US Dollar Index was hanging around its lowest level since early November and is eventually weighing heavily on the major, dragging it back closer to the 112.00 handle. 

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With an empty US economic docket, broader market risk sentiment would continue to be a key determinant of the pair's movement during NY trading session ahead of the prelim Q1 GDP figures from Japan, due for release during early Asian session on Thursday.

Technical levels to watch

A follow through selling pressure below 112.10-112.00 immediate support has the potential to drag the pair towards 111.50-45 intermediate support ahead of the 111.00 handle. On the flip side, any recovery move back above mid-112.00s now seems to confront resistance near 112.70-75 area, which if cleared might trigger a short-covering bounce beyond the 113.00 round figure mark towards 113.30-35 horizontal resistance.