- USD/JPY faced rejection at the descending 5-day average in early Asia.
- Yen is now gaining ground amid continued risk aversion in stocks.
- Coronavirus fears continue to dominate the market sentiment.
The anti-risk Japanese yen continues to draw bids amid persistent Coronavirus-led risk aversion in the financial markets.
The USD/JPY pair is currently trading at 108.88, representing a 0.12% drop on the day, having faced rejection at the descending 5-day moving average hurdle at 109.06 in early Asia.
Risk-off
The Asian stocks are again flashing red with Japan's Nikkei leading the way with a400 point or 2% drop. Stocks in Australia, South Korea, and Hong Kong are also reporting losses alongside the 0.5% drop in the futures on the S&P 500.
Fear that the coronavirus outbreak may turn into a pandemic, derailing the global growth recovery, is likely forcing investors to rotate money out of stock markets and into safe havens like yen.
As per the latest reports, the death toll in China has risen to 132 and the number of reported cases has topped 6,000. Further, Japan's Chief Cabinet Secretary was out on the wires a few minutes before press time, informing markets that 6 Japanese people, who recently returned from Wuhan, China have tested positive for coronavirus.
With risk-off showing no signs of abating, the pair risks extending the losses toward the 50-day average support at 108.72 - more so, as traders have ramped up bets for Fed rate cut by November's meeting. The US central bank kept rates steady on Wednesday and reiterated commitment to higher inflation.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stabilizes near 1.0400 after upbeat US data
EUR/USD consolidates daily recovery gains near 1.0400 following the release of upbeat United States data. Q3 GDP was upwardly revised to 3.1% from 2.8% previously, while weekly unemployment claims improved to 220K in the week ending December 13.
GBP/USD drops toward 1.2550 after BoE rate decision
GBP/USD stays on the back foot and declines toward 1.2550 following the Bank of England (BoE) monetary policy decisions. The BoE maintained the bank rate at 4.75% as expected, but the accompanying statement leaned to dovish, while three out of nine MPC members opted for a cut.
Gold price resumes slide, pierces the $2,600 level
Gold resumes its decline after the early advance and trades below $2,600 early in the American session. Stronger than anticipated US data and recent central banks' outcomes fuel demand for the US Dollar. XAU/USD nears its weekly low at $2,582.93.
Bitcoin slightly recovers after sharp sell-off following Fed rate cut decision
Bitcoin (BTC) recovers slightly, trading around $102,000 on Thursday after dropping 5.5% the previous day. Whales, corporations, and institutional investors saw an opportunity to take advantage of the recent dips and added more BTC to their holdings.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.