USD/JPY drops 112.00 on North Korea news

The bid tone around the Japanese Yen strengthened, pushing the USD/JPY pair to a session low of 111.96 on news that North Korea countermeasure may mean Hydrogen Bomb in Pacific.

Treasury yields & S&P 500 futures drop  

Signs of risk aversion are seen across the major markets. Currently, S&P 500 futures are down 6 points or 0.24%. The yield on the 10-year Treasury note is down one basis point.

The resulting carry unwind is pushing the Japanese Yen higher. Currently, the USD/JPY pair is trading at 111.98; down 0.44% on the day. The spot clocked a high of 112.72 yesterday on widening US-Japan 10-year yield spread.

The spot could drop big time below 112.00 levels if North Korea news rocks the European markets.

USD/JPY Technical Levels

A break below 111.76 [1-hour 100-MA] would open up downside towards 111.10 [Sep 20 low on 1-hour chart]. A violation there would expose 110.62 [July 24 low].

On the other hand, a break above 112.16 [200-DMA] could yield a re-test of 112.56 [session high] and 112.72 [previous day's high].