OctaFX | OctaFX Forex Broker
Open trading account

USD/JPY clings to gains, struggles to find acceptance above 106.00 mark

  • USD/JPY gains some positive traction after the BoJ’s intervention on Friday.
  • Receding safe-haven demand weighed on the JPY and remained supportive.
  • A subdued USD demand failed to provide any impetus, rather capped gains.

The USD/JPY pair jumped back closer to the top end of its weekly trading range, albeit struggled to extend the momentum beyond the 106.00 mark and quickly retreated around 50 pips from daily tops.

Following the previous day's volatile/two-way price swings, the pair managed to regain some positive traction and was being supported by a sudden turnaround in the global risk sentiment, which tends to weigh on the Japanese yen's perceived safe-haven status.

The Bank of Japan (BoJ) on Friday injected 500 billion yen into the system via an unscheduled repo operation and later announced an unscheduled buying of JPY 200 billion Japanese Government Bonds (JGBs) to stabilize the markets amid coronavirus outbreak-led global panic.

This was in addition to the Fed's overnight move to try to calm unusual disruption in the US Treasury markets. The Fed said that it will inject more than $1.5 trillion of temporary liquidity into the short-term funding markets, which boosted investors' confidence.

Meanwhile, the US dollar consolidated the overnight strong gains and did little to contribute to the positive move, albeit seemed to be the only factor capping the upside. The greenback on Thursday benefitted as the global reserve currency amid the recent brutal selling in the equity markets.

It will now be interesting to see if the pair is able to capitalize on the move or continues with its struggle to build on the momentum beyond the 106.00 round-figure mark amid absent relevant market-moving economic releases and mounting fears over the coronavirus outbreak.

Technical levels to watch


Forex Today: Dethroning King Dollar? Unlikely, as coronavirus panic may turn into financial crisis

Here is what you need to know today: Dead cat bounce? S&P futures are, and Asian stocks have been attempting a recovery after a massive liquidation pa
Read more Previous

EU’s Breton: Confident that the ECB will take its responsibilities

“I have no doubt that the European Central Bank (ECB) will take its responsibilities”, said France’s European Union (EU) Commissioner Breton while res
Read more Next
Start livechat