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USD/JPY plummets to 109.00 neighborhood, 7-month lows

   •  Global growth concerns continue to benefit JPY's safe-haven status.
   •  The USD bulls remain on the defensive and do little to lend support.

The global flight to safety continued benefitting the Japanese Yen and dragged the USD/JPY pair to the 109.00 neighborhood, or seven-month lows, in the last hour.

The pair kicked off the New Year on a weaker note and remained heavily offered for the fourth consecutive session amid the prevalent risk-off mood, especially after today's disappointing Chinese macro data.

The Caixin Chinese Manufacturing PMI fell into contraction territory for the first time since early May 2017 and further fueled concerns about global economic growth, triggering a fresh wave of risk-aversion trade.

Adding to this, expectations of a dovish Fed in 2019, coupled with partial US government shutdown kept the US Dollar bulls on the defensive and further collaborated to the pair's ongoing downfall. 

Meanwhile, a mildly negative tone around the US Treasury bond yields also did little to inspire the bulls and failed to lend any support, or stall the slide to the lowest level since early June 2018.

It would now be interesting to see if the pair is able to find any buying interest at lower levels or continues with its bearish trajectory, despite near-term oversold conditions.

Technical levels to watch

Weakness below the 109.00 handle is likely to accelerate the fall towards 108.75 intermediate support before the pair eventually drops to test the 108.40-35 region. On the flip side, any recovery move might now confront some fresh supply near the 109.65-70 region, above which the pair is likely to make an attempt towards reclaiming the key 110.00 psychological mark.

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