On Monday, the USD/JPY remains in negative territory.
The yield on a 10-year US Treasury bond has dropped by more than 7%.
The US Dollar Index is hovering just below 93.00, clinging to daily gains.
During European trading hours, the USD/JPY pair came under severe bearish pressure and plummeted to 109.07, its lowest level in in two months. Despite a brief recovery in the early American session, the pair remains in negative territory, with the pair last seen trading at 109.45, down 0.6 percent.
Risk-off flows allowed the safe-haven JPY to beat its peers at the start of the week. On Monday, market mood was weighed down by renewed concerns about the escalating number of coronavirus cases undermining the global economic recovery. Major equity indices in the United States are down between 1% and 2.2 percent, highlighting the gloomy market atmosphere.
Meanwhile, the 10-year US Treasury bond yield is falling by more than 7%, making it harder for the USD/JPY to recover its losses.
The greenback, on the other hand, appeals to investors as a safer alternative to riskier competitors, particularly commodity-linked currencies, and hence restricts USD/downside JPY’s for the time being. The US Dollar Index is currently trading at 92.85, up 0.15 percent.
Analysts at TD Securities believe the USD/JPY will continue to fall toward the mid-108.00s.
“USD/JPY remains heavy after trading below the provisionally created near-term support around 109.72 last week,” experts explained. “As we move down in the chart, our initial emphasis is on the MTD lows and the top of the Ichimoku cloud. Both of these numbers are clustered around 109.55. We believe the cloud base (109.12) and the 108.50 (+/-) zone are the next set of downside attractors.”/n
