Forex News

USD/JPY bears attack 107.00 amid risk-off markets

  • USD/JPY fails to extend the latest recovery moves.
  • Risk-tone heavies as Fed Chair acknowledged economic pessimism, President Trump reiterated favors for negative rates.
  • Fears of trade wars, virus wave 2.0 also weigh on the markets’ trading sentiment.
  • Qualitative catalysts will be important to watch for direction ahead of the US session.

USD/JPY drops from 107.10 to 107.04 amid the early Thursday morning in Asia. Even so, the yen pair stays away from the previous day’s low of 106.74, which in turn portrays it’s sideways moving. While the trade/virus-led risk aversion should ideally weigh on the quote, the US dollar’s safe-haven status seems to confuse the traders.

Trump-Powell fight goes on…

While the Federal Reserve Chairman Jerome Powell ruled out instances of negative rates at least now, despite being worried about the economic outlook, US President Donald Trump recently disagreed with him.

In his latest comments, US President Trump said to like negative rates and rekindled tension between the US diplomats and monetary policy authorities. The Fed Chair earlier said, “Additional policy measures may be needed to avoid lasting damage to the economy.”

Trade/virus fears keep risk-aversion on the table…

In addition to the US-China fights over the phase one deal and virus outbreak, US President Trump’s order to rethink about the administration’s previous decision to diversify in China stocks triggered fresh tension between the global powerhouses. Additionally, a bill is on the US Senate’s table that could offer President Trump the power to sanction China if it steps back in providing information as to how the coronavirus (COVID-19) spread out of its boundaries.

Elsewhere, China is also at loggerheads with Australia after the Aussie PM pushed calls for the investigation into the dragon nation’s role in virus outbreak.

As portraying the risk-off sentiment, Wall Street kept the red on Wednesday whereas US Treasury yields declined further.

Traders may now keep eyes on the trade/virus updates for fresh impulse amid a lack of Japan/US data events in Asia. Though, the weekly US Jobless Claims, expected 2500K versus 3169K, could entertain the market during the later part of the day.

Technical analysis

Sustained trading below a 50-day EMA level of 107.70 gradually drags the quote towards the monthly low near 106.00. Though, 10-day EMA, around 107.00, offers immediate support to the pair.


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