USD/JPY tumbles to fresh 2-month lows near 109.60

The sudden pick up of the demand for the safe haven JPY quickly dragged USD/JPY to fresh 2-month lows in the 109.60.

USD/JPY lower on US yields

JPY gained further traction today following the attacks in Australia, which triggered a bout of risk aversion and the subsequent flight to safer assets early in the Asian session. The pair has also derived attention from the slump in AUD/JPY following today’s incidents and weak results from Australian net exports contribution in Q1.

Adding to the downside, yields in the US money markets remain on the defensive today, with the 10-year benchmark hovering over the 2.15% area and fading yesterday’s bull run to weekly tops near 2.19%.

In the data space, IBD/TIPP Economic Optimism Index is expected seconded by JOLTs Job Openings for the month of April in the US docket. In Japan, the next risk event will be the GDP figures for the January-March period.

On the positioning front and according to the latest CFTC report, the speculative community has increased its JPY net shorts positions to 2-week highs during the week ended on May 30.

USD/JPY levels to consider

As of writing the pair is losing 0.62% at 109.67 and a breakdown of 109.56 (low Jun.6) would aim for 108.69 (low Apr.20) and finally 108.11 (2017 low Apr.17). On the other hand, the next hurdle lines up at 110.39 (200-day sma) followed by 110.51 (61.8% Fibo of 108.11-114.39) and finally 111.16 (55-day sma).