USD/JPY rebounds from 112.30 support area, recovers early lost ground

The USD/JPY pair stalled its post-NFP retracement move from 2-1/2 month tops and has recovered around 30-pips from an important support near the 112.30 region.

The latest news report, via Russia's RIA news agency, that N. Korea is preparing to test a long-range missile provided a minor boost to the Japanese Yen's safe-haven appeal and weighed the pair at the start of a new trading week. 

   •  No signs of imminent North Korean provocations - Yonhap

However, holiday-thinned liquidity conditions, with Japanese markets close on Monday for a public holiday, helped limit deeper losses. 

Adding to this, growing December Fed rate hike expectations, reinforced by positive tone around the US Treasury bond yields, underpinned the US Dollar demand and helped the pair to recover from lows.

   •  USD: Further gains are expected - Westpac 

The US markets are also closed in observance Columbus Day and hence, the pair remains at the mercy of any fresh N. Korea-related headlines/broader market risk sentiment.

Technical levels to watch

Immediate resistance is pegged near 112.80-85 area, above which the pair is likely to move back above the 113.00 handle and dart towards 113.25 important supply zone. 

On the flip side, 112.35-30 area remains immediate support to defend, which if broken is likely to accelerate the fall back towards the very important 200-day SMA support near the 111.90 region.