- USD/JPY stays on the defensive around 108.30 on Friday.
- Investors remain sceptical on the ¥108 trillion aid package.
- US Fed releases another stimulus package worth $2.3 trillion.
The soft note around the greenback is dragging USD/JPY to the 108.30 region on Good Friday, area coincident with the key 200-day SMA.
USD/JPY risks further downside
USD/JPY is down for the second session in a row so far on Good Friday, navigating the vicinity of the 200-day SMA near 108.30 against the backdrop of increasing concerns on the coronavirus outbreak in Japan, extra stimulus pumped by the Federal Reserve and scepticism on the recently announced emergency economic package by the Japanese government.
In fact, Tokyo is expected to announce suspension measures in several businesses in light of the broad-based state of emergency declared in the country following the pick-up in infected cases as of late.
Furthermore, investors remain sceptical on the effectiveness to counter the impact of the COVID-19 on the economy of the ¥108 trillion stimulus package released by the government earlier in the week, hinting at the likeliness that extra fiscal measures would surely be needed.
In the US, the Federal Reserve said it will inject $2.3 trillion in order to support local governments and small-medium sized companies. The Fed’s measure came after weekly claims rose by around 6.6 million during last week.
USD/JPY levels to consider
As of writing the pair is down 0.06% at 108.40 and faces immediate contention at 108.20 (weekly lows Apr.9) seconded by 106.92 (monthly low Apr.1) and then 106.48 (monthly low Oct.3 2019). On the other hand, a breakout of 109.38 (monthly high Apr.6) would aim to 111.71 (monthly high Mar.24) would open the door to 112.22 (2020 high Feb.20).