USD/JPY plunges to 1-1/2 week lows, farther below mid-113.00s

   •  USD weighed down by uncertainty over the US tax plan.
   •  Risk-off mood boosting Yen’s safe-haven demand.

The USD/JPY pair extended its rejection slide from the 114.00 handle and tumbled to 1-1/2 week lows, around the 113.30-25 region in the past hour.

Mounting uncertainty surrounding the Republican-led tax-cut legislation continued exerting some downward pressure on the US Dollar through the mid-European session. 

   •  USD consolidates as the US fiscal drama plays out - BBH

Adding to this, a sudden selling wave across European equity markets, pointing to risk-off mood, provided an additional boost to the Japanese Yen's safe-haven appeal and collaborated to the pair's sharp fall to its lowest level since Oct. 31.

Meanwhile, the market seems to have largely ignored a goodish pickup in the US Treasury bond yields, with reviving safe-haven demand and broad-based USD weakness turning out to be key determinants of the pair's heavily offered tone.

Today's US economic docket features the release of usual weekly initial jobless claims and would now be looked upon for some short-term trading impetus.

The key focus, however, would remain on the US tax bill text, which is expected to be revealed later today and should play an important role in determining the pair's near-term trajectory. 

Technical levels to watch

Omkar Godbole, Editor and Analyst at FXStreet writes: "The spot looks set to breach the support at 113.44 (Oct. 6 high) and move towards the upward sloping 50-day MA currently positioned at 112.17. On the higher side, only consecutive day-end closes above 114.18 (falling trendline hurdle) would reignite the bullish move."