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  • USD/JPY came under renewed bearish pressure during American session.
  • Risk aversion helps JPY gather strength against its rivals.
  • 10-year US Treasury bond yield is down more than 8%.

The USD/JPY pair spent the first half of the day moving sideways near 107.00 but lost its traction during the early trading hours of the American session. As of writing, the pair, which touched a fresh monthly low of 106.64, was trading at 106.69, losing 0.37% on a daily basis.

JPY capitalizes on risk aversion

The intensifying flight-to-safety seems to be providing a boost to safe-haven JPY on Thursday. Heightened fears over a second coronavirus wave in the US caused Wall Street’s main indexes to start the day deep in the negative territory. At the moment, the Dow Jones Industrial Average and the S&P 500 indexes are down 3.1% and 2.6% on the day, respectively.

Confirming the risk-off market environment, the 10-year US Treasury bond yield is losing 3.8% on the day at 0.67% and weighing on the greenback. After rebounding toward 96.50 during the European session, the US Dollar Index, once again, turned south and erased its daily gains to turn flat at 96.05.

Earlier in the day, the data published by the US Department of Labor showed that there were 1.54 million Initial Jobless Claims in the week ending June 6th. Although this reading came in slightly better than the market expectation, it failed to provide a boost to market sentiment.

On Friday, Industrial Production and Capacity Utilization data will be featured in the Japanese economic docket.

Technical levels to watch for

 

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