USD/JPY holds weaker below 112.00 handle amid risk-off mood

The greenback held weaker against its Japanese counterpart, pushing the USD/JPY pair lower for the third consecutive session.

The pair extended overnight sharp retracement from an important supply zone around mid-112.00s and is currently placed near multi-day lows amid reviving safe-haven demand. 

   •  US Treasury yields drop on North Korea

Assets considered as havens got a boost after N. Korean Foreign minister on Monday described the US President Donald Trump's recent rhetoric as a declaration of war and said Pyongyang has the right to shoot down US planes. 

   •  North Korea boosting defence on east coast - Yonhap

Meanwhile, the market continues to evaluate the latest political development in Japan, where in PM Shinzo Abe announced to dissolve the Parliament on Thursday and called a snap general election, though didn’t give a date.

Against the backdrop of divergence between the Fed and BOJ monetary policy outlooks, investors now look forward to today's speech by the Fed Chair Janet Yellen. Hints about a possible December rate hike move might help the pair to resume with its prior appreciating move. 

Technical levels to watch

A follow through selling pressure below mid-111.00s could accelerate the fall towards the 111.00 neighborhood before the pair eventually drops to its next support near the 110.70 region.

On the upside, any up-move now seems to confront fresh supply near the 112.00 handle, above which the pair is likely to dart back towards 112.50-55 important supply zone.