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  • USD/JPY rose to a fresh five-day high on Monday.
  • 10-year US Treasury bond yield is down more than 5%.
  • Wall Street’s main indexes look to open deep in the negative territory.

The broad-based USD weakness caused the USD/JPY pair to close the previous week in the negative territory. On Monday, safe-haven flows provided a boost to the greenback and allowed the pair to advance to a five-day high of 103.89 during the European trading hours.

Ahead of Wall Street’s opening bell, however, USD/JPY started to consolidate its daily upside with the JPY also capitalizing on risk aversion and the pair last seen trading at 103.53, where it was up 0.2% on a daily basis.

Mood sours amid renewed virus fears

The new strain of the coronavirus in the UK, which reportedly is 70% more transmissible than the original COVID-19, forced major European economies to close their borders with the UK. Despite the vaccine rollout, this development revived concerns over an unsteady global economic recovery and forced investors to seek refuge.

Confirming the risk-averse market environment, the benchmark 10-year US Treasury bond yield is down nearly 5% on Monday and the S&P 500 Futures are losing 2%. At the moment, the US Dollar Index is gaining 0.5% at 90.58.

The Federal Reserve Bank of Chicago will release it National Activity Index on Monday but market participants are likely to react to Wall Street’s main indexes’ performance rather than this mid-tier data. 

There won’t be any significant macroeconomic data releases featured in the Japanese economic docket on Tuesday.

Technical levels to watch for