- USD/JPY witnessed some selling on Thursday amid persistent selling surrounding the greenback.
- COVID-19 vaccine optimism might cap gains for the safe-haven JPY and help limit the downside.
- Holiday-thinned liquidity conditions could further hold investors from placing fresh bearish bets.
The USD/JPY pair witnessed some fresh selling during the early European session and refreshed daily lows, around the 104.20 region in the last hour.
Following the two-way/directionless move over the past two trading day, the pair met with some fresh supply on Thursday and was being weighed down by the prevalent selling bias surrounding the US dollar. Wednesday’s softer labor market report from the US added to market worries about the economic fallout from the imposition of new COVID-19 restrictions in several US states.
The data further fueled speculations for additional monetary easing by the Fed and continued weighing on the greenback. Apart from this, a mixed performance in the European equity markets provided a modest lift to the safe-haven Japanese yen and further contributed to the USD/JPY pair’s intraday fall. That said, the latest optimism over the progress on remedies for the highly contagious coronavirus disease might help limit deeper losses, at least for the time being.
Investors might also refrain from placing any aggressive directional bets amid relatively thin liquidity conditions on the back of the Thanksgiving holiday in the US. This makes it prudent to wait for some strong follow-through selling, possibly below the 104.00 mark, before traders start positioning for the resumption of the recent bearish trajectory and positioning for any further depreciating move.