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  • Dow Jones Industrial Average erases nearly 2% on Monday.
  • US Dollar Index drops below 99.50 in American session. 
  • Coming up: Trade Balance data from China for March.

After spending the first half of the day moving sideways near the 108 handle, the USD/JPY pair lost its traction during the American trading hours as the dismal market mood allowed the JPY to find demand as a safe-haven. As of writing, the pair was trading at its lowest level since April 2nd at 107.53, erasing 0.85% on a daily basis.

JPY capitalizes on risk-off flows

Wall Street’s main indexes registered decisive gains last week boosted by the Fed’s new programs that will provide $2.3 trillion in loans to support the economy. However, investors seem to have opted out to take a cautious stance on Monday while waiting for the first-quarter earnings figures. At the moment, the Dow Jones Industrial Average is down 1.8% on the day and the S&P 500 is erasing 1.55%. 

On Tuesday, Trade Balance data from China will be watched closely by the market participants for fresh clues regarding the rebound in the economic activity in March. A less-than-expected increase in exports could cause markets to remain risk-averse. 

Meanwhile, the greenback came under renewed selling pressure to keep the bearish momentum on the pair intact. The US Dollar Index is now looking to finish the day in the negative territory below the 99.50 mark.

Technical levels to watch for