USD/JPY remains depressive following the previous session’s heavy sell-off.
US Dollar Index remains steady above 93.00.
Dow Jones sinks more than 600 points as risk sentiment falters on Chinese property giant Evergrande.

USD/JPY continues to trade lower in the initial Asian session on Tuesday. The pair consolidated below 109.50 as risk sentiment worsened after the Chinese Evergrande fallout. At the time of writing, USD/JPY is trading at 109.39 down 0.01% for the day.

The US Dollar Index (DXY), which tracks the performance of the buck against the basket of six major currencies, remains elevated near 93.20 with 0.05% gains. Investors took a safety flight in US bonds amid a global sell-off in financial markets. The US benchmark 10-year Treasury yields fell nearly 6 basis points to 1.31% as yields move inversely to bond prices.

Market assessed the risk of China’s second-largest property developer to expand across global markets. The Dow Jones dropped more than 600 points, the most since July and S&P 500 shed more than 75 points.

Meantime, US Treasury Secretary Janet Yellen warned that the failure of the debt ceiling raise could spark a historic financial crisis. The comments weighed on the greenback’s performance.

On the other hand, the Japanese Yen enjoyed its safe-haven appeal and attracted traders attention on Monday. The sentiment was further supported after the Bank of Japan (BOJ) is expected to keep its policy steady this week, but could offer a bleaker view on exports and output due to the impact of the pandemic.

As for now, traders turn their attention to the US Housing Starts, Building Permits, and Current Account data to gauge the market sentiment.

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