USD/JPY clings to gains near session tops, eyeing to reclaim 110.00 mark
- USD/JPY adds to the overnight modest gains and climbs back closer to 110.00 mark.
- The prevailing risk-on mood continued weighing on the JPY’s safe-haven demand.
- Rising US bond yields, stronger USD remained supportive ahead of Powell’s testimony.
The USD/JPY pair gained some follow-through traction for the second consecutive session on Tuesday, with bulls now eyeing to reclaim the key 110.00 psychological mark.
The prevailing risk-on mood – as depicted by a positive trading sentiment around equity markets – continued weighing on the Japanese yen's perceived safe-haven status and assisted the pair to build on the previous session's intraday bounce from the 109.55 region.
USD/JPY supported by a combination of factors
Despite market concerns over the economic impact of the deadly coronavirus, the expected new round of economic stimulus measures by China continued boosting lending some support to the global risk sentiment and undermined demand for traditional safe-haven assets.
It is worth reporting that the death toll in China has risen to more than 1,000 and the number of people infected has increased to over 42,000. The growing number of fatalities is causing worries about the economic impact of the novel coronavirus epidemic on the economy.
This coupled with sustained buying interest surrounding the US dollar further collaborated to the pair's modest uptick back closer to the 110.00 round-figure mark. The already stronger greenback was further supported by a goodish pickup in the US Treasury bond yields.
It will now be interesting to see if bulls are able to capitalize on the positive momentum or refrain from placing any fresh bets ahead of Tuesday's event risk – the Fed Chair Jerome Powell's semiannual testimony before the Congress, due later during the US session.
Technical levels to watch