- USD/JPY attempts a move beyond 108.00 mark amid broad-based USD strength.
- The global rush to hoard cash benefitted the USD’s global reserve currency status.
- The risk-off mood underpinned the JPY’s safe-haven demand and capped gains.
The USD/JPY pair refreshed session tops in the last hour, with bulls now looking to extend the momentum further beyond the 108.00 round-figure mark.
Despite the Fed’s latest moves to pump billions of dollars into the financial system, investors have been selling almost everything amid nervousness over the economic fallout from the coronavirus pandemic.
The rush to hoard cash triggered a selloff in the US Treasuries and lifted the yields sharply higher on Wednesday, which provided a strong boost to the US dollar’s status as the global reserve currency.
In fact, the key USD Index surged past the key 100.00 psychological mark and was seen as one of the key factors behind the pair’s strong intraday positive move of around 125 pips from sub-107.00 levels.
Meanwhile, concerns that aggressive stimulus measures by majors central bank would not be able to avert a deep coronavirus-driven recession continued denting investors’ appetite for perceived riskier assets.
This led to another round of a selloff across the global equity markets, which extended some support to the Japanese yen’s safe-haven status and kept a lid on any strong follow-through positive move for the pair.
Hence, it will be prudent to wait for some strong follow-through buying, rather a sustained move above the 108.00 mark before traders start positioning for any further near-term appreciating move.
Technical levels to watch
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