Having surrendered early gains to fresh 8-week highs, the USD/JPY pair dropped to fresh session lows post mixed US economic data.
The pair extended its retracement from the 112.00 neighborhood and dropped below mid-111.00s after data released from the US showed housing starts declined -0.8% m-o-m and came-in at an annualized pace of 1.175 million for August.
The negative impact, however, to some extent was negated by slightly better-than-expected 5.7% m-o-m rise in building permits, which ticked higher to 1.3 million annualized pace during the reported period.
Other data showed, US current account deficit unexpectedly jumped to $123.1 billion during the second quarter of 2017, way above previous quarter's $116.8 billion and worse than $115.1 billion expected.
Meanwhile, a sharp spike in import price index, jumping 0.6% m-o-m in August, hinting towards a possible rise in inflationary pressure in coming months also did little to lend any immediate respite for the US Dollar bulls.
With European equity markets reversing early gains and trading on a cautious note, the prevalent cautious environment was seen benefitting the Japanese Yen's safe-haven appeal and further collaborated to the pair's offered tone through early NA session.
Technical levels to watch
A follow through retracement below the 111.00 handle is likely to accelerate the slide towards 110.70 horizontal level en-route the next major support near the 110.30-25 region.
On the upside, 111.60 level now seems to act as immediate resistance, above which the pair is likely to make a fresh attempt towards conquering the 112.00 handle before heading towards the very important 200-day SMA barrier near the 112.25 region.
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