USD/JPY bounces off lows, still weaker around 112.00 mark

Renewed geopolitical tensions boosted the Japanese Yen's safe-haven appeal and pushed the USD/JPY pair back below the 112.00 handle during Asian session on Friday.

The pair snapped five consecutive days of winning streak and corrected from two-month highs amid a fresh wave of global risk aversion trade, triggered by news reports that N. Korea could consider another hydrogen bomb test, this time over the Pacific Ocean.

   •  Forex Today: N. Korea news spooks Asia again

Meanwhile, the post-FOMC US Dollar up-move also seems to have lost steam, despite Thursday's upbeat US economic data, and further collaborated to the heavily offered tone surrounding the major. 

However, political developments in Japan, with the latest news stating that the Japanese snap election date is set for Oct 22nd, weighed on the domestic currency and helped the pair to recover around 35-40 pips from session lows.

   •  Sources: Japanese snap election date set for Oct 22nd - BBG

In absence of any major market moving economic releases, the broader market risk sentiment is likely to act as an exclusive driver of the pair's movement on the last trading day of the week.

Technical levels to watch

Recovery back beyond the very important 200-day SMA, currently near the 112.20 region, could get extended towards mid-112.00s, above which the pair is likely to make an attempt to conquer the 113.00 handle.

On the flip side, 111.65 level now becomes immediate support to defend, which if broken would turn the pair vulnerable to head back towards testing the 111.00 round figure mark.