USD/JPY slides farther below 111.00, inching back closer to multi-month lows

The greenback remained on the back foot against its Japanese counterpart, with the USD/JPY pair trading with bearish bias for the third consecutive session and heading back to over 4-month lows touched last week.

Deteriorating investors' risk-appetite, in wake of a suspected suicide bombing on Monday in St. Petersburg, Russia, has been boosting demand for the Japanese Yen's safe-haven appeal. The prevalent risk-off mood, as depicted by the ongoing slide in equity markets, is further reaffirmed by sliding US treasury bond yields, which has failed to extend any support to the US Dollar and stall the pair's downslide further below the 111.00 handle. 

In absence of any major market moving economic releases, with the scheduled release of trade balance and factory orders from the US, broader market risk sentiment and the US treasury bond yield dynamics would continue to derive the pair's movement ahead of the FOMC meeting minutes, due for release on Wednesday.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet notes, "Pair’s failure to re-enter the expanding channel on Friday followed by a retreat on Monday to 110.85 and the extension of losses to 110.50 levels today in the wake of the bearish RSI and DMI indicator suggests the spot is likely to test and possibly take out the psychological level of 110.00, in which case a quick fire drop to 109.65 is likely. Also take note of the minor falling wedge formation. Only a break above 111.82/bullish break from the falling wedge formation would revive bullishness."