USD/JPY dropped 27 pips and last sits....>

DOLLAR-YEN: USD/JPY dropped 27 pips and last sits at Y109.40, with the yen

outperforming all of its G10 peers as risk-off flows came to the fore, boosted

by a Globe & Mail story re: the U.S. being set to proceed with the extradition

of Huawei CFO Meng detained in Canada. The Nikkei 225 started on the front foot,

but slipped into negative territory and last trades ~0.7% lower. Worth

mentioning sources reported Japanese sellers of USD/JPY in early Tokyo trade. 

- Bears look for a break below Y109.39, which represents the 23.6% fibo

retracement of the move from Y107.77 to Y109.89 & limited losses overnight. The

next layer of support below is provided by the Jan 18 low at Y109.06.

Conversely, bulls need to retake yesterday's high of Y109.77 before challenging

the Dec 25 low (now resistance) of Y110.00. 

- The BoJ is set to leave its policy unch. on Weds, but focus will fall on the

Bank's quarterly outlook report, and the CPI projections therein. Elsewhere,

Japanese highlights this week include trade balance due Weds, Nikkei m'fing PMI

due Thurs & Tokyo CPI due Fri, while usual BoJ Rinban ops will also attract

interest.