USD/JPY slips below 109.00 handle to near two-month lows

The USD/JPY pair remained heavily offered for the fourth consecutive session and has now slipped below the 109.00 handle amid prevalent risk-off environment.

Intensifying war of words between the US and N. Korea continue to drive investors towards traditional safe-haven assets, including the Japanese Yen. This coupled with some renewed US Dollar selling pressure, following yesterday's dismal US PPI print further collaborated to the pair's downfall to its lowest level since June 14.

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With today's slide, the pair has now reversed over 200-pips from post-NFP swing highs as investors now brace for the closely watched consumer inflation figures from the US, due later during the NA session. Against the backdrop easing inflationary pressure, a softer US CPI print would dampen prospects of any additional Fed rate hike action in 2017 and pave way for continuation of the pair's near-term downward trajectory. 

Apart from the US macro data, speeches from a couple of FOMC members - Dallas Fed President Robert Kaplan and Minneapolis Fed President Neel Kashkari, would also influence sentiment surrounding the greenback and drive the pair through NY trading session on the last trading day of the week. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the pair gives no sign of changing course, despite being oversold, as in the 4 hours chart, technical indicators are hovering near oversold readings, but the price keeps posting lower lows, while moving further below bearish 100 and 200 SMAs. The immediate support is 108.80, June's low, with a break below the level favoring an extension down to 108.12 this year's low set last April."