AUD/JPY: risk off on North Korea sends the cross over a point lower

Currently, AUD/JPY is trading at 86.06, down -1.08% on the day, having posted a daily high at 87.10 and low at 85.71.

AUD/JPY is in a minor correction of the recent supply that has seen the cross sent down 130 pips as investors scramble for cover and away from the carry trades. Japanese chief cabinet secretary Suga was on the wires, via Reuters, stating that "North Korea's missile launch was an unprecedented and a grave threat."

Yen taking up the bid on the N.Korea missile news

Otherwise, the Aussie had been supported on a weaker dollar and copper prices making fresh grounds to the upside overnight, following on from the bid in Shanghai yesterday. The greenback is on the back foot due to concerns over a foggy Federal Reserve in respect to the tapering of the balance sheet and further rate hikes in December a less likely scenario. USD/JPY was bid on a better risk environment overnight but stocks failed to maintain the upside and this N.Korean news has seen the Dow lose 100 points warning of a risk off the start for Tuesday's trade and a potential positive for AUD/JPY bears.

AUD/JPY levels

AUD/JPY ran into demand at 85.70with 85.45 being the Aug low. The next leg to the downside targets a cent lower through the 85 handle an June resistance. The up side levels are 86.20 and 87.20 before 87.50 recent Aug highs.