USD/JPY drops to four-week lows under 108.40 as Wall Street tumbles
- Equity prices extend losses in Wall Street on global growth concerns.
- USD/JPY accelerates decline on Friday, points to further losses.
The USD/JPY pair remained under pressure on Friday amid a sharp decline in Wall Street that boosted the Japanese yen. The pair fell to 108.29, the lowest level since January 8. Near the end of the week, it was hovering around 108.40, a relevent technical support.
In Wall Street, the Dow Jones was falling more than 500 points or 1.75% and the S&P 1.68%. Fears about the impact on global growth from the virus outbreak weigh on stocks on Friday. US bonds soared and among currencies, the yen and the Swiss franc rallied.
USD/JPY has fallen in eight out of the last nine trading days. On Friday it accelerated the decline as risk aversion intensified. US economic data did not offer support to the pair. The greenback also lost ground versus main European currencies. The DXY tumbled 0.40% from 97.90 to below 97.50. Emerging markets currencies were the most affected.
A new week, a new month
The new month brings historic changes with the United Kingdom out of the European Union but still markets will continue to focus on the coronavirus. Chinese PMI data is due on Monday (numbers unlikely to include impact of the virus).
In the US on Monday, the Democratic Party presidential primaries officially kick off. Regarding data, the economic calendar for next week included the ISM and the official employment report. Market consensus looks for an increase in NFP of 156K.