USD/JPY bounces off two-month lows, eyeing to reclaim 112.00 handle

The USD/JPY pair was seen consolidating its slide to two-month lows and remained below 112.00 handle, albeit has managed to bounce off Asian session lows near 111.60 region.

Earlier during Asian session, persistent risk aversion mood, as depicted by negative sentiment surrounding Asian equity markets, benefitted the Japanese Yen's safe-haven appeal and dragged the pair to its lowest level since Nov. 28. The selling pressure around the major, however, abated amid ongoing greenback recovery, with the key US Dollar Index building on to Monday's steady recovery back above 100.00 psychological mark and helping the pair to recover some ground to currently trade around 111.85-90 region. 

Meanwhile, nervousness ahead of the US President Donald Trump's meeting with Japanese Prime Minister Shinzo Abe on Friday has also kept investors on the back foot and might restrict any swift near-term recovery for the major. 

Later during NA session, the US economic docket features the release of trade balance data and would be watched for short-term trading opportunities. In the meantime, broader market risk-sentiment would continue to derive demand for safe-haven assets and would be a key determinant of the pair's movement on Tuesday.

Technical levels to watch

Immediate upside resistance is pegged at 112.00 handle above which the pair is likely to recover back to 112.40-45 resistance ahead of 112.65-70 horizontal zone. On the flip side, weakness below session low support near 111.60 level seems to drag the pair towards 111.35 level (Nov. 28 low), en-route 111.00 round figure mark.