USD/JPY stays calm around mid-113.00s, eyes on Wall Street

• USD/JPY is trading in a tight range on Monday.
• Safe-haven flows dominate the financial markets at the start of the week.
• Wall Street's main indexes remain on track to open deep in the negative territory.

Despite the renewed dollar strength, the USD/JPY pair closed flat on Friday and started the new week in a calm manner. With safe-haven flows dominating the financial markets on Monday, the pair is having a tough time gaining traction as it continues to move in a tight range around 113.50.

Global equity indexes plunge

The Nikkei 225 Index lost more than 2% on Monday as investors remain increasingly concerned that the Coronavirus Omicron variant could weigh on the global economic activity by forcing strict restrictions.

On the flip side, Japan's parliament approved a $317 billion budget, which will include cash payouts for families with children, to support the economy. This development seems to be limiting the JPY's gains despite the fact that the currency's safe-haven status.

The US economic calendar won't be featuring and high-tier data releases in the remainder of the day and investors will pay close attention to the performance of US stocks. Currently, S&P 500 Futures are down 1.75% on the day, suggesting that risk-off flows will dominate the markets in the second half of the day.

In the meantime, the benchmark 10-year US Treasury bond yield is down more than 1% and additional losses in yields could cause USD/JPY to come under renewed bearish pressure in the American session.

Technical levels to watch for