USD/JPY hangs near monthly lows, around mid-112.00s

   •  The global flight to safety underpinning JPY and exerts downward pressure.
   •  A modest uptick in the US bond yields helped limit deeper losses, for now.
   •  Traders now eye US housing market data for some short-term opportunities.

The USD/JPY pair struggled to register any meaningful recovery and remained within striking distance of monthly lows touched earlier today.

The pair extended last week's sharp retracement slide from over one-month tops and remained on the defensive through the Asian session on Tuesday amid the prevalent risk-off mood.

A fresh wave of global risk-aversion trade, triggered by a steep overnight sell-off on Wall Street, was seen benefitting the Japanese Yen's safe-haven status and eventually exerting some downward pressure.

However, a modest uptick in the US Treasury bond yields, though failed to revive the US Dollar demand, extended some support and helped limit any deeper losses, at least for the time being.

The greenback held flat on Tuesday and continues to be weighed down by Friday's dovish comments by the Fed's newly appointed vice chair Richard Clarida, who warned of a slowing global economy and said that interest rates are nearing a neutral rate. 

Currently hovering around mid-112.00s, the lowest level since Oct. 30, market participants now look forward to the US housing market data for some fresh impetus later during the early North-American session. In the meantime, the USD price dynamics and the broader market risk sentiment might continue to act as key determinants of the pair's momentum.

Technical levels to watch

A follow-through selling pressure has the potential to continue dragging the pair further towards the 112.10-112.00 region en-route its next major support near the 111.80-75 zone. On the flip side, any attempted recovery beyond the 112.65-70 region could get extended but seems more likely to remain capped at the 113.00 handle.