USD/JPY holds weaker near 112.00 handle, one-month lows
• Reviving safe-haven demand underpins JPY.
• Shrug-off weaker Japanese trade balance data.
The USD/JPY pair extended its consolidative price action through the Asian session and held with a mild negative bias near one-month lows.
The latest political development in the Euro-zone's largest economy, Germany, wherein Chancellor Angela Merkel declared failure to form a coalition government, was seen underpinning the Japanese Yen's safe-haven demand.
The news also offset disappointing Japanese trade data, coming in to show a surplus of ¥285.4 billion, narrower than the ¥330 billion expected, and momentarily dragged the pair below the 112.00 handle to its lowest level since mid-October.
However, a goodish pickup in the US Dollar demand primarily led by a sell-off in the EUR/USD major and despite weaker tone surrounding the US Treasury bond yields helped limit deeper losses, at least for the time being.
In absence of any major market moving economic releases, broader market risk sentiment would remain an exclusive driver of the pair's movement at the start of a new trading week.
Technical levels to watch
A follow-through weakness below the 112.00 handle is likely to find support near 111.70 level, below which the pair is likely to accelerate the fall towards mid-111.00s.
On the flip side, recovery attempt beyond 112.20 level could get extended towards an important hurdle near mid-112.00s, which if cleared might trigger a short-covering move towards 50-day SMA, currently near the 112.70 region.