USD/JPY inter-markets: could break below 100.00 level if risk-appetite deteriorates

Having defended 100.00 psychological mark, the USD/JPY pair staged a tepid recovery and moved back above 101.00 handle during Asian session on Friday. The pair, however, lost its upside momentum and erased all of Friday's recovery gains to currently trade in neutral territory around 100.70 region.

Markets already seems to have ruled out possibilities of next Fed rate-hike in November, given the proximity of the US election to the Fed's next meeting, and has failed to assist the pair to register any meaningful recovery. Moreover, cautious sentiment in equity markets is driving investors to the perceived safety of the Japanese Yen and is further hindering the recovery momentum of the pair. 

Friday's slide in the US and Japanese 10-years Treasure bond yields have been supportive of the prevalent risk-off sentiment. However,  slide in the Volatility Index (VIX) is pointing the other way and is the only intrinsic not justifying the pair's reversal from session highs. Hence, even a tepid recovery in VIX would turn the pair vulnerable to immediately slide to 100.40-30 support area before eventually breaking through 100.00 mark and head towards testing August swing lows support near 99.60-55 region.