First, we need to understand the trigger behind the move. This morning it was all about geopolitics. We got to know North Korea had launched a missile test. And this time everything was different, as we saw an overflight of Japanese airspace! And it is already a violation of sovereignty, and escalation of tensions between North Korea and the rest of the world. Japanese government issued an emergency alert.
What does it mean for currencies? It means that safe heavens are of interest again, and the demand for JPY and CHF may be rising in the nearest future. But is it enough to trigger the breakout of really strong support in the pair with USD?
It remains to be seen, as Japanese government is not happy with the appreciating yen hitting the export sector of the country. There is a big chance to see a reversal of the downtrend or, at least, a deep correction. If confirmed, USDJPY next target may be at 108.90 followed by 109.50.