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  • USD/JPY gains traction for the second consecutive session on Thursday.
  • Some follow-through USD buying remained supportive of the move up.
  • The prevailing risk-off mood seemed to be the only factor capping gains.

The USD/JPY pair failed to capitalize on its early uptick to levels beyond the 108.00 mark and has now retreated around 30-35 pips from daily tops.

The US dollar continued benefitting from its status as the global reserve currency amid persistent worries over the economic fallout from the coronavirus pandemic, which were further fueled by Wednesday’s dismal US economic data.

Sustained USD buying assisted the pair to build on the previous day’s modest intraday bounce from sub-107.00 level, or two-week lows and gain some follow-through traction for the second consecutive session on Thursday.

However, the prevailing risk-off mood across the global equity markets underpinned the Japanese yen’s safe-haven demand and turned out to be one of the key factors that kept a lid on any further gains for the major, at least for now.

Meanwhile, that latest news that Japanese Prime Minister Shinzo Abe is set to declare a nationwide state of emergency, which will last up to a month, did little to provide any meaningful impetus, albeit might help limit the downside.

Moving ahead, market participants now look forward to the US economic docket, highlighting the release of weekly jobless claims, which might influence the USD price dynamics and produce some meaningful trading opportunities.

Technical levels to watch