OctaFX | OctaFX Forex Broker
Open trading account
Back

USD/JPY erases early recovery gains, drops to 108.80 area

  • 10-year US Treasury bond yield erases more than 1%.
  • US Dollar Index advances beyond 98 on Tuesday.
  • Coming up: CB Consumer Confidence Index and Durable Good Orders data from US.

The USD/JPY pair staged a technical rebound during the first half of the day but failed to hold above the 109 mark as the JPY continues to find demand as a safe-haven amid concerns over the coronavirus outbreak weighing on the Chinese economy and the global economic recovery. As of writing, the pair was trading at 108.80, erasing 0.08% on a daily basis.

JPY continues to capitalize on risk-off flows

According to the latest available data, the death toll from the coronavirus now stands at 106 with the number of confirmed cases rising above 4,000. Commenting on the potential impact of the outbreak on the Chinese economy, "we expect the epidemic to be particularly hard on the service sector in China, but retail sales could also suffer, which could hurt imports," said Danske Bank analysts. 

Reflecting the sour market sentiment, the 10-year US Treasury bond yield, which closed the previous six trading days in the negative territory, is down more than 1% on Tuesday. On the other hand, the S&P 500 futures are up 0.2% but this situation reflects a correction following Monday's sharp fall rather than a recovering sentiment.

In the meantime, the US Dollar Index is at its highest level since early December at 98.07, adding 0.13% on the day to help the pair limit its losses. Durable Goods Orders and the Conference Board's Consumer Confidence data from the US will be looked upon for fresh impetus in the second half of the day.

Technical levels to watch for

 

USD/JPY: Door open for a visit to 108.40 – UOB

According to FX Strategists at UOB Group, USD/JPY could extend the downside to the 108.40 region in the next weeks. Key Quotes 24-hour view: “USD gapp
Read more Previous

When are the US durable goods orders and how could they affect EUR/USD?

Tuesday's US economic docket highlights the release of durable goods orders data for December. The US Census Bureau is scheduled to release the monthl
Read more Next
Start livechat