USD/JPY remains weak, below 106.00

The Japanese yen is sharply higher vs. its American counterpart on Monday, sending USD/JPY more than 1% lower to sub-106.00 levels.

USD/JPY lower on risk aversion

The pair has gathered further downside pressure backed by an increasing sentiment towards the risk aversion in the global markets.

Upcoming central banks’ meeting ahead in the week plus recent polls favouring a ‘Brexit’ scenario has been propping up the risk-off trade today and a swelling cautiousness amongst traders, prompting spot to open the door for a test of 2016 lows in the mid-105.00s.

Japanese Industrial Production results and US Retail Sales figures will be in the limelight tomorrow, as the upcoming main events.

USD/JPY levels to watch

As of writing the pair is retreating 1.07% at 105.85 facing the immediate support at 105.52 (2016 low May 3) and then 105.18 (low Oct.15 2015). On the flip side, a break above 107.92 (high Jun.7) would aim for 108.57 (20-day sma) and then 108.93 (55-day sma).