USD/JPY subdued around 108.50 on risk-off trade

Fresh inflows into the Japanese safe haven currency dragged USD/JPY to fresh lows in the 108.30/25 band on Tuesday, where it seems to have found some buying interest for the time being.

USD/JPY weaker on NK headlines

Another missile launch from North Korea earlier in the day sparked a wave of fresh buying interest around the safe haven assets, lending extra legs to JPY and relegating the pair to the lower bound of the range near 108.30.

Adding to the pair’s daily downside, the greenback remains on the defensive as market participants continue to adjust to the recent steady message from Chair J.Yellen in her speech at the Jackson Hole Symposium. In this regard, the upcoming data from the US labour market and inflation tracked by the PCE, both due on Friday, have regained extra relevance.

Furthermore, key yields of the US 10-year benchmark have retreated to levels last seen in last November below the key support at 2.10%, all collaborating with the pair’s pullback.

Later in the session, house prices tracked by the S&P/Case-Shiller index are due seconded by the speech by Chicago Fed C.Evans (voter, centrist).

USD/JPY levels to consider

As of writing the pair is retreating 0.67% at 108.52 and a breach of 108.27 (low Aug.29) would aim for 108.11 (low Apr.17) and finally 102.54 (low Nov.3 2016). On the upside, the immediate hurdle emerges at 109.32 (10-day sma) followed by 109.76 (21-day sma) and then 109.86 (38high Aug.25).