Breaking: USD/JPY breaches 106.00, targets Sept 2019 low as risk-off intensifies

• The spot bleeds as growing coronavirus cases in US kills risk.
• Yen rallies as US equity futures, Treasury yields crash.
• Risk-trends to dominate ahead of the key US NFP data.

The US dollar remains battered against the Japanese yen in Thursday’s American trading so far, knocking-off the USD/JPY pair to its weakest level since September 2019.

At the press time, the spot is printing a new six-month low of 105.98, as the bears look to crack the 106 support, which exposes the September low of 105.74.

The dollar bears remain relentless, mainly powered by the collapse in Wall Street stocks and US equity futures, as investors fled to safety in the US bonds, eventually triggering a massive crash in the US Treasury yields. The 10-year T-yields are down 8%, flirting with the record low of 0.906 reached in the last hour. The S&P 500 futures tanked nearly 4% and briefly breached the 3k mark.

The latest leg down in the major was due to the fresh COVID-19 cases confirmed in the US, aggravating the concerns over the economic fallout in the world-largest economy. More so, markets started pricing in another Fed rate cut this month amid the rapid spread of the respiratory illness.

On JPY-side of the equation, the risk-off flows will continue to benefit the anti-risk yen, causing a double whammy to the pair.