A 7.4 magnitude earthquake struck Japan and triggered tsunami alerts. Also, some cooling systems at nuclear reactors were suspended to prevent damage. So far, there are no reports of fatalities.

The breaking news about the earthquake, after the US session ended and as Tokyo was just waking up caught markets in low-liquidity mode – at around the same time of day when the GBP flash crash occurred. Until that point, the greenback seemed unstoppable against the yen, even as it took a breather against other currencies.

The rally of the greenback is based on Trumponomics but may run out of steam.

However, the worrying news out of Japan cut the rally short. USD/JPY stopped at 111.40, the levels seen back in late May. The pair trades at 111. Support is at 110. Further below, we find 107.50. Resistance awaits at 112.

Is this just a longer breather? Assuming the earthquake is indeed not a real disaster, will the rally resume? Or will the yen now stabilize like its peers?

More: USD/JPY set to reach 115.50 – Danske