• Yen boosted by reviving safe-haven demand.
• Japanese economy records modest growth for the second straight quarter.
• Persistent USD weakness adds to downward pressure ahead of US CPI/retail sales.
The greenback selling remains unabated, with the USD/JPY pair hammered down below the 113.00 handle, or fresh 2-week lows.
A fresh wave of global risk aversion trade, with Japan's Nikkei 225 ending the day with a loss of over 300-points, or 1.5%, boosted the Japanese Yen's safe-haven appeal.
Sliding US Treasury bond yields further reinforces global flight to safety and added to the already weaker sentiment around the buck. In fact, the key US Dollar Index dropped to its lowest level since late October and further collaborated to the heavily offered tone surrounding the major.
• US curve flattening gathers pace – Westpac
On the economic data front, the Japanese GDP grew 0.3% q-o-q in Q3, down from previous quarter's 0.6% growth. The reading was slightly below 0.4% expected but indicated second straight quarter of growth and extended support to the Japanese Yen.
Currently struggling below the 113.00 handle, investors now look forward to the key US macro data - the latest inflation figures and monthly retail sales data, for some fresh impetus. In the meantime, broader market risk sentiment would continue to drive the pair through the European trading session.
Technical levels to watch
"The spot looks set to test 112.48 in the next 24 hours. Further losses towards 111.56 cannot be ruled out, still, caution is advised below 112.48, given the bullish bias of the 50-day MA" writes Omkar Godbole, Analyst and Editor at FXStreet.
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