USD/JPY drops to lowest in 5-months near 108.00 before rebounding

• USD/JPY hits fresh monthly lows and rebounds. 
• Wall Street on a volatile day: test weekly intraday lows and recovers. 

The yen rose across the board during the last session of the week supported by risk aversion. The Dow Jones was in negative territory on a volatile day, creating concerns among investors that increased the demand for safe haven currencies, among them, the yen outperform. Also, US bonds rose favoring further the Japanese currency. 

USD/JPY dropped to 108.02, reaching the lowest level since September 8 before bouncing back above 108.50 as equity prices trimmed daily losses. As of writing it was trading at 108.60, modestly lower for the day, consolidating a weekly loss of around 150 pips and headed toward the second lowest weekly close since November 2016. 

GBP/JPY dropped to 148.90 while EUR/JPY fell to 131.95, both hitting levels last seen in November. AUD/JPY bottomed at 84.00 (lowest since June) before rebounding to 84.60/70. 

USD/JPY Levels to watch 

To the downside, the area between 108.00 and 108.50 continues to be a wide supportive range. A consolidation below could open the doors favoring a bearish acceleration. To the upside, resistance lies at 108.90 followed by 109.30 (Feb 9 high) and the strong barrier at 109.70.