US equities flirted with danger at the end of last week, breaking its earlier September low but managing to close just above that before the weekend.
With futures under some pressure today and the risk mood looking more defensive, it puts the focus on yen pairs once more with USD/JPY staying in the hunt of a sixth consecutive daily decline in trading so far today.
The pair is keeping lower as the dollar is softer across the board but a further nudge lower in the equities space is also a key factor to watch in case it leads to broader risk aversion, which is likely to help fuel further bids into the yen.
For now, USD/JPY is keeping just above its 31 July low @ 104.19 but expect sell stops to be present just below that - more so with liquidity risks associated with the long weekend in Japan (domestic markets closed until Wednesday).
Should that level give way, we could see downside momentum in USD/JPY accelerate and there isn't much stopping the pair from a push towards 102.00 next.
If US equities start to break below the lows yesterday, that will only give sellers more conviction to chase such a move in the sessions ahead.