USD/JPY sinks to fresh lows near 109.20

The Japanese yen remains on a firmer note today, now dragging USD/JPY to fresh daily lows in the 109.20 region.

USD/JPY weaker on risk aversion

Spot is accelerating its decline today in response to an increasing buying interest in the safe haven JPY, backed in turn by a renewed selling mood hitting the greenback and a prevailing risk-off environment

Adding to the decline, Japan’s government has confirmed the delay of the sales tax hike until October 2019, prompting market participants to revert the recent selling pressure around JPY.

JPY is deriving further support following a sharp drop in GBP/JPY, in response to a resurgence of ‘Brexit’ fears after recent polls suggested a pick-up in the ‘Leave’ vote.

USD/JPY levels to watch

As of writing the pair is losing 1.28% at 109.28 facing the immediate support at 108.6621 (low May 18) ahead of 105.52 (2016 low May 3). On the other hand, a breakout of 111.45 (high May 30) would open the door to 111.92 (high Apr.28) and finally 112.33 (100-day sma).