USD/JPY: Pressured below 108.00 on broad US dollar weakness

• USD/JPY extends the previous day’s losses.
• Risk-tone dwindles amid the coronavirus outbreak in the US, expectations of murky earnings.
• A lack of major data could keep traders pushed towards virus headlines for fresh impulse.

USD/JPY drops to 107.70 during the early Tuesday morning in Asia. In doing so, the yen pair remains weak around Monday’s low, also the two-week bottom, as risk-tone remains heavy due to the coronavirus (COVID-19) crisis.

Although US President Donald Trump and his COVID-19 Task Force team recently tried to placate traders, the fears of a pessimistic earnings report from the US top-tiers couldn’t be ruled out.

The pandemic has so far infected 582, 911 people in the US while also propelling the death toll to 23,322 by Monday. With this, the world’s largest economy also becomes the global hotspot while crossing Italy.

On this, the Fed policymakers conveyed mixed messages with the Minneapolis Fed President Neel Kashkari citing darker days ahead whereas Vice Chair Clarida and Atlanta Fed President Bostic flashing positive signs.

Also to know is the New York Fed’s signal to tame the frequency of some of the repo actions. It’s worth mentioning that such market operations have offered relief to the US dollar in recent times.

While portraying the risk-off, Dow Jones and S&P flashed losses by the end of their Monday’s trading session but futures linked to both register mild gains at the time of writing.

Looking forward, the return of the full markets will offer active trading session but a lack of data/events could keep virus updates in the driver’s seat.

Technical analysis

200-day SMA near 108.35 offers immediate resistance whereas the month-start bottom surrounding 106.90 could check further declines.