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  • Yen finds bids as the S&P 500 futures signal sustained risk aversion. 
  • USD/JPY has backed off from session highs near 105.20. 
  • BOJ’s liquidy injection has failed to inspire equity bulls and yen bears. 

USD/JPY has pulled back from session highs with the anti-risk yen finding bids, possibly due to the decline in the US stock futures. 

Rejected at 105.20

The pair fell from 105.20 to 104.68 in the 60 minutes to 01:30 UTC and was last seen trading around 104.89. 

The futures Wall Street’s benchmark equity index S&P 500 are currently down 1.64 percent, having started the Asian session on a relatively less risk-off note. 

Looking at the negative action in futures, the global equities and the US stock markets are likely to trade in the red on Friday. Currently, the Asian equities are flashing red with Japan’s Nikkei reporting a 9% decline. 

The BOJ offered a liquidity injection of 500 billion yen early Friday, but so far, that has failed to boost the risk sentiment and weaken the Japanese yen. 

The Federal Reserve too unveiled a massive liquidity injection worth $1.5 trillion on Thursday to quell liquidity fears and to combat “temporary disruptions” in credit markets. That, however, failed to put a bid under stocks. The S&P 500 closed Thursday with a 9.5% loss. 

With risk-off moves in stocks showing no signs of slowing down, the USD/JPY pair may continue to trade in the red. 

Technical levels

 

Expert score

5

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