USD/JPY: bears sleeping at 111.70 in Tokyo open

Currently, USD/JPY is trading at 111.72, down -0.01% on the day, having posted a daily high at 111.82 and low at 111.63.

Forex today: "An act of war" spun markets around into risk-off late trade

USD/JPY opens in Tokyo offered but relatively subdued considering the level of risk that could otherwise be perceived in fresh inflammatory comments from North Korea in a war of words. 

BOJ Minutes: Inflation has stopped declining, QQE and YCC to continue till target met

Korean foreign minister Ri Yong Ho said that US Trump's comments over the weekend were clearly a declaration of war. Safe haven flows sent USD/JPY from 112.26 to 111.47 the low in the US session.

Meanwhile, the Chicago Fed national activity fell from +0.03 to -0.31 (vs -0.25 expected) while Dallas Fed manufacturing activity rose from 17.0 to 21.3 (vs 11.5 expected). Fed's Dudley was bullish on the US economy and felt that the weakness in inflation was starting to pass and that tightening should continue.  Evans was not so confident that such weakness in inflation was transitory. 

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the 4 hour chart indicates that the pair bounced from near a critical support, the 23.6% retracement of the 107.31/112.71 rally around 111.40, now the immediate support. "The same chart shows that technical indicators gained downward momentum within bearish territory, but also that the price remains well above its 100 and 200 SMAs. In the 111.40 area, the pair also has its 200 DMA, reinforcing the strength of the level, and giving stronger implications to a bearish breakout of such level," noted Valeria.