USD/JPY weighed down by risk-off mood, still manages to hold above 113.00 mark

The USD/JPY pair came under some fresh selling pressure on Thursday and extended previous session's sharp retracement from near two-month highs.

Escalating geopolitical tensions between the US and N. Korea, especially after the later successfully test-launched an intercontinental ballistic missile earlier this week continues to weigh on investors sentiment. The same is evident from weaker appetite for riskier assets - like equities, which is eventually benefitting the Japanese Yen's safe-haven appeal and weighing on the major.

   •  S&P: Likelihood of military action from North Korean ICBM launch is low

Meanwhile, lack of any strong follow through US Dollar buying interest after the much-awaited FOMC meeting minutes, released on Wednesday, extended little support to the pair, with broader market risk sentiment acting as an exclusive driver of the pair's movement through Asian session.

   •  FOMC: Still debating on the timing of balance sheet reduction - ANZ

The pair has still managed to recover from session lows and hold its neck above the 113.00 handle as investors now look forward to a slew of important US macro data, due later during the NA session for some fresh impetus. Today's US economic docket features the release of ADP report, trade balance data and ISM non-manufacturing PMI.

Technical outlook

Omkar Godbole, Analyst and New Editor at FXStreet writes: Bullish exhaustion noted near the triangle resistance could yield a pull back, although moving average set up indicates the dips to sub-112.50 levels could find fresh bids. The exhaustion if followed by an end of the day close today below 112.73 (Tuesday’s hanging man low) would signal the top has been made at 113.69.