- A slight deterioration in the global risk sentiment benefits the JPY’s safe-haven status.
- A sudden turnaround in the US bond yields further collaborated to the intraday slide.
- The ongoing USD bullish run helped limit losses ahead of the US ISM manufacturing PMI.
The USD/JPY pair dropped to fresh session lows in the last hour, albeit once again showed some resilience below the 106.00 round figure mark.
Reviving safe-haven demand exert some pressure
For the second consecutive session on Tuesday, the pair struggled to capitalize on its early uptick to the 106.40 region and witnessed some intraday pullback in the wake of reviving safe-haven demand. A turnaround in the global risk sentiment – as depicted by a weaker trading sentiment around equity markets – underpinned the Japanese Yen’s safe-haven demand and exerted some downward pressure on the major.
The global flight to safety was reinforced by some renewed weakness in the US Treasury bond yields, which further inspired bearish traders and collaborated to the pair’s slide back closer to the overnight swing lows. However, the prevalent bullish sentiment surrounding the US Dollar, hitting fresh multi-year tops beyond the 99.00 handle, seemed to be the only factor that helped limit any deeper losses, at least for now.
As investors await a fresh development on the US-China trade war, Tuesday’s US economic docket – highlighting the release of ISM manufacturing PMI – will be looked upon for some short-term trading opportunities later during the early North-American session.
Technical levels to watch
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