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USD/JPY consolidates as market come up for air, suffocating in COVID-19

  • USD/JPY holding steady as markets pick out the positives in stimulus plans.
  • COVID-19 cases slowing down, although the USA is getting hit hard. 
  • Stocks come up for air on less negative themes.

USD/JPY is trading at 111.14 within a range of between 111.04 and 111.53, -0.06% at the time of writing in a positive open in Asian stocks following Wall Street's impressive rally whereby the DJIA jumped by the most since 1933 amid stimulus hopes.

Risk-on back in play

We have seen the ASX 200  add +4.1%, the Nikkei 225 +5.1% and the KOSPI +3.8%. This rides a wave of US benchmarks positive closes, with the Dow DJIA, added on 2,112.98 points, or 11.37%, to close at 20,704.91, the S&P 500 index added 209.93 points, 9.38%, to close at 2,447.33, and the Nasdaq Composite index rose 557.18 points, or 8.12%, ending trading at 7,417.86. For 2020, this all leaves the Dow down by 27.45%, the S&P 500 -24.25%, and the Nasdaq is 17.33% lower. In Asia today, there is some chatter that Apple could begin re-opening some retail stores in the first half of April. 

Meanwhile, following the close on Wall Street we also had a rather optimistic COVID-19 Task Force presser, more on that here: 

  • US Pres. Trump: Dow surges in historic gain, we want re-open for business when time is right

Despite dire PMI data, which would be expected due to the COVID-19 crisis, there was a more optimistic tone to due to the hopes of a $2 trillion rescue package from Congress. Also, the implications of the Fed’s unlimited QE and Germany's close to 35% of GDP in terms of stimulus as well as the nations considering a post-COVID-19 stimulus as part of an enormous stimulus plan lifted spirits as investors can start to see how there could be a way through the mess.

However, many would argue that it is far too soon to be picking a bottom. The VIX Index remains above 60%, compared to about 15% as recently as mid-February as an indication and reminder of where in reality markets are at this juncture. Over the previous 24 hours, 85 percent of new COVID-19 cases were in Europe and the United States, and of those, 40 percent were in the United States – we may not have seen the worst of this yet in the USA.

USD/JPY level 

 

 

 

 

 

 

 

 

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