The pair has been trading narrowly over the past few hours, sitting between 107.40-60 for the most part as both the dollar and yen are leading gains against the major currencies bloc in European morning trade.
The softer risk mood is helping to underpin the yen, with European equities down by ~3% across major indices while US futures are also down by just over 3% currently.
Meanwhile, bond yields are also weighed lower with US 10-year yields down by 6 bps to 0.605% as we start to look towards North American trading soon.
From a technical perspective, the momentum is also supportive of the yen as we are seeing price action keep below the 200-day MA (blue line) and under the 108.00 handle.
But amid the risk-off flows, the dollar is also keeping firmer in trading today as we see the greenback flex its muscles against all the other major currencies.
This reaffirms that dollar demand is still evident despite the Fed's efforts to try and ease the situation. But unless USD/JPY starts to chase a move higher above the 200-day MA, the path of least resistance in the pair remains lower as risk sells off in an orderly fashion.
The key word there being orderly, because we all know how USD/JPY shot up from 102.00 to near 111.50 when there was disorderly behaviour in the market.