- USD/JPY remained depressed through the Asian session on Thursday.
- Coronavirus jitters, geopolitical tensions benefitted the safe-haven JPY.
- Sliding US bond yields undermined the USD and added to the selling bias.
The USD/JPY pair bounced around 30 pips from weekly lows set earlier this Thursday, albeit struggled to extend the recovery and remained below the 107.00 mark.
The pair edged lower for the third consecutive session and was being pressured by a combination of factors, including the prevalent cautious mood and a softer tone surrounding the US dollar.
Concerns over the second wave of coronavirus infections and geopolitical tensions in Asian weighed on investors’ sentiment. This, in turn, benefitted the Japanese yen’s perceived safe-haven status.
The anti-risk flow was further reinforced by the ongoing slide in the US Treasury bond, which undermined the USD demand and further contributed to the USD/JPY pair’s slide on Thursday.
The pair drifted back closer to one-month lows set last week, albeit lacked any strong follow-through selling and staged a modest intraday bounce of around 20-25 pips from the 106.70 region.
It will now be interesting to see if the pair is able to capitalize on the attempted recovery or prolongs this week’s bearish trend amid anxiety over a surge in new COVID-19 cases.
Moving ahead, market participants now look forward to the US economic releases – Initial Weekly Jobless Claims and Philly Fed Manufacturing Index – for some meaningful trading impetus.
Technical levels to watch
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