USD/JPY drops to session lows on N. Korean news

The USD/JPY pair ran through some fresh offers near the 112.80-85 region and has now dropped back closer to its 7-day old trading range support. 

The pair's latest leg of fall over the past hour or so could be attributed to some fresh safe-haven demand after Russia’s news agency, Interfax (IFX), quoted a Russian lawmaker saying that North Korea possesses a ballistic missile with a range of 3,000 km and after modernization if will be able to reach the US territory.

Adding to this, sliding US Treasury bond yields further dented the already weaker sentiment surrounding the US Dollar and further collaborated to the pair's slide to session lows, around the 112.40-35 region. 

   •  US Dollar stays depressed near 93.30

Today's US economic docket lacks any major market moving economic releases and hence, broader market risk sentiment and the US bond yield dynamics would continue to act as key determinants of the pair's movement ahead of Wednesday's FOMC meeting minutes.

Technical levels to watch

A follow through weakness below 112.30 area would turn the pair vulnerable to dip below the 112.00 handle and test the very important 200-day SMA support, currently near the 111.90-85 region.

On the flip side, momentum back above 112.50-55 zone might continue to confront resistance near the 112.85-90 region, above which the pair is likely to surpass the 113.00 handle and head towards retesting its next hurdle near the 113.25 region.