USD/JPY refreshes session low, back below mid-113.00s

   •  Japanese Yen boosted by reviving safe-haven demand. 
   •  Sliding US bond yields add to the downward pressure. 

The USD/JPY pair surrendered early modest gains to the 113.70 region and refreshed session lows in the past hour.

The pair's latest leg of sharp downslide could be attributed to a sharp sell-off in Japanese equity markets, with Nikkei 225 closing with a loss of 300-points and was seen boosting the Japanese Yen's safe-haven appeal. 

Reviving demand for traditional safe-haven assets is being reinforced by sliding US Treasury bond yields, which helped offset early US Dollar strength and further collaborated to the pair's downslide. 

   •  Nikkei/FX when equity/ bond correlation breaks down – Deutsche Bank

With December Fed rate hike move nearly priced in by the markets, renewed worries over the US tax cut legislation might continue to keep a lid any meaningful up-move for the major. 

   •  Fed's Harker - Fed does not have to remove a lot of accommodation to return to neutral

Looking at the broader picture, the pair has been oscillating within a familiar trading range over the past three weeks. In absence of any fresh catalyst, the pair seems more likely to extend is consolidative action ahead of Tuesday's key speeches by the BoJ Governor Haruhiko Kuroda and the Fed Chair Janet Yellen. 

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Technical levels to watch

Immediate support is pegged near the 113.15-10 region, below which the pair is likely to break through the 113.00 handle and head towards testing its next support near the 112.70 level.

On the upside, 113.65-70 zone now seems to have emerged as immediate resistance, which if cleared could lift the pair back towards the 114.00 handle en-route 114.20-25 strong horizontal resistance.