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Forex News

USD/JPY fades a spike to 105.70, but recovery mode still intact amid risk-off

  • The spot remains heavy but manages to stay above 105.00.
  •  Kudlow’s fiscal stimulus headlines offer fresh signs of life.  
  • Coronavirus concerns to continue to dent risk, as T-yields extend rout.

USD/JPY is seeing some volatile moves over the last hour, as it now looks to stabilize around 105.30 region amid widespread risk-aversion.

The spot consolidates the downside to a new seven-month low of 105.00 reached earlier today after risk-off gripped the markets amid renewed fears over the coronavirus outbreak, as the number of cases across the globe continues to rise.

The US stocks tumbled once again and triggered a rush to the US bonds, which led to the US Treasury yields resume its ongoing carnage. The benchmark 10-year Treasury yields plunged to a new record low of 0.674%, shedding over 25% on the day.

Over the last hour, the major attempted recovery and spiked to a fresh session high of 105.71 after White House (WH) Economic Advisor Kudlow said that “The Trump administration is considering immediate fiscal measures, separate from the tax cut being crafted ahead of the election.” 

However, the spike was quickly faded and the rates fell back to 105.15 levels amid a fresh selling-wave seen in the US equity futures and Treasury yields. Also, the Washington Post (WaPo) report, citing that the WH is looking to defer taxes for travel and airline industries, watered down the hopes of any meaning recovery in the spot.

Meanwhile, the greenback remains broadly pressured, as stronger US payrolls data failed to negate another Fed rate cut expectations. Therefore, the risks remain slanted to the downside for USD/JPY, in the face of mounting virus-led economic concerns.

USD/JPY technical levels to consider

 

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