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  • GBP/JPY hits multi-week low, sheds 400 pips on risk aversion. 
  • US stocks suffer a four-digit drop on coronavirus fears. 

GBP/JPY hit a 7.5-week low of 140.82 early Friday and is currently trading largely unchanged on the day at 141.21. 

400-pip drop

The JPY cross is currently down nearly 400 pips from highs around 145.00 observed last Friday. The pair has also found acceptance under the 100-day average for the first time since Oct. 10. 

The sell-off seen this week could be associated with the coronavirus-led risk aversion in the financial markets. 

The Dow Jones industrial average plunged nearly 1,200 points on Thursday, confirming its worst four days since the 2008 financial crisis. Investors are worried that the coronavirus, which began in China and has spread to Japan, South Korea, Italy, Iran, the United States, and numerous other countries, will put a sizable dent in global growth. 

At press time, the futures on the S&P 500 are reporting a 0.33% gain. As a result, the bid tone around the yen could weaken, allowing a minor bounce to the 200-day average hurdle at 141.72. However, big gains look unlikely, as the major Asian indices like Nikkei and Kospi are flashing red and could end up pushing the US index futures lower. 

Technical levels