• Drops back closer to over one-week low.
• Risk aversion trade supports safe-haven demand.
• US tax reform uncertainty exerting additional pressure.
The USD/JPY pair extended its sharp rejection slide from the 114.00 handle and touched a fresh session low level of 113.42 in the past hour.
The BOJ Summary of Opinions released on Thursday turned out to be somewhat less dovish and prompted some fresh selling around the major. The downslide accelerated following a sharp reversal in Japanese stocks, which provided an additional boost to the Japanese Yen's safe-haven appeal.
Moreover, increasing nervousness over the fate of the long-awaited US tax reform bill kept the US Dollar bulls on defensive and did little to stall the pair's drop back closer to over 1-week lows touched in the previous session.
Meanwhile, a modest pickup in the US Treasury bond yields might now collaborate towards limiting any deeper declines, at least for the time being.
As investors awaited fresh information, broader market risk sentiment might continue to influence the pair's movement ahead of the initial weekly jobless claims data from the US.
• Markets: The calm before the calm? - Westpac
Technical levels to watch
Immediate support is pegged near the 113.25-15 region, below which the pair is likely to retest 112.90 strong horizontal support before eventually dropping to 112.45 intermediate support en-route the 112.20 level.
On the upside, 113.70 area now seems to act as immediate resistance, which if cleared could assist the pair to conquer the 114.00 handle and head back towards the 114.35-45 heavy supply zone.
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