USD/JPY trades in red below 108 after G7 statement

• G7 voices readiness to take actions to counter coronavirus impact.
• 10-year US Treasury bond yield is down more than 3%.
• Wall Street looks to open mixed on Tuesday.

The USD/JPY pair dropped to a fresh daily low of 107.60 with the initial reaction to the G7 statement on coronavirus response but recovered modestly ahead of Wall Street’s opening bell. As of writing, the pair was down 0.48% n the day at 107.78.

Mixed reaction to G7 statement

G7 said the group is ready to take actions to counter the negative impact of the coronavirus crisis on the global economy, including fiscal measures where appropriate. US stock index futures pared their early gains and slumped into the negative territory to reflect the market’s disappointment at the lack of coordinated rate cuts.

The 10-year US Treasury bond yield also pushed lower to allow the bearish pressure on the pair to remain intact. 

Commenting on the G7 discussion, Japanese Finance Minister Aso said the group could take fiscal measure as well as monetary measures. “If the spread of the virus is contained, domestic demand would not fall so sharply,” Aso added.

On the other hand, the greenback stayed relatively resilient against its peers and helped the pair limit its losses. At the moment, the US Dollar Index is up 0.1% on the day at 97.60. Later in the session, the ISM-NY Business Conditions Index and the IBD/TIPP Economic Optimism Index will be looked upon for fresh impetus. Investors will be paying close attention to Wall Street’s performance as well. 

Technical levels to watch for