USD/JPY struggles below mid-108.00s, over one-week lows

• Softer risk mood helped revive safe-haven demand and exerted some pressure.
• Fed rate cut expectations kept the USD bulls on the defensive and weighed further.

The Greenback held weaker against its Japanese counterpart, with the USD/JPY pair struggling below mid-108.00s, or over one-week lows set earlier this Wednesday.
 
The pair added to the overnight modest losses and witnessed some follow-through selling for the second consecutive session on Wednesday – also marking its fifth day of a negative move in the previous six – amid reviving safe-haven demand.

Weighed down by reviving safe-haven demand

The latest Brexit development, wherein the UK lawmakers rejected the government's proposed timetable for passing legislation to ratify its Brexit deal, weighed on investors' sentiment and underpinned the Japanese Yen's perceived safe-haven demand.
 
A slight deterioration in the global risk sentiment was evident from a softer mood around equity markets and reinforced by a subdued action surrounding the US Treasury bond yields, which further inspired bearish traders and collaborated to the pair's weaker tone.
 
Meanwhile, the US Dollar remained on the defensive on the back of firming market expectations that the Fed will cut interest rates further at its upcoming meeting on October 29-30 and did little to lend any support or provide any meaningful impetus.
 
In absence of any major market-moving economic releases on Wednesday, it will now be interesting to see if the pair is able to find any buying interest at lower levels or continues with its recent corrective slide from the vicinity of 109.00 handle touched on October 15.

Technical levels to watch