EUR/JPY dips below 122.00 despite weak Japanese exports
|- EUR/JPY has dropped below 122.00, having faced rejection at 122.16 in early Asia.
- Japanese exports fell for 12th straight month, raising risk of an economic contraction.
- Even so, Yen is pushing higher. Charts indicate scope for a deeper pullback in EUR/JPY.
The EUR/JPY pair is flashing red at press time, as the anti-risk Yen is drawing bids despite the dismal Japanese economic data released at 23:50 GMT.
The currency pair is currently trading at 121.99, representing marginal losses on the day, having hit a high of 122.16 two hours ago.
Japanese exports drop
Exports fell 7.9% year-on-year in November, a smaller decline than the 8.6% decline expected by economists in a Reuters poll. Meanwhile, exports to the US fell 12.9% year-on-year in November and overall imports sank 15.7% to mark the largest decline since Oct. 26.
The trade deficit came in at JPY 82.1 billion versus a JPY 369.0 billion shortfall seen by economists.
The 12th straight monthly decline in exports has raised the risk of a fourth-quarter contraction. Further, there are not signs of risk aversion in the equities. The futures on the S&P 500 are currently trading flat and so is the 10-year treasury yield (at 1.88%).
Even so, the Japanese Yen is gaining ground, possibly due to technical factors.
The pair created a classic Doji candle on Tuesday, validating buyer exhaustion signaled by Friday's bearish pinbar candle.
Looking forward, the downside move will likely gather traction if the equities turn red and treasury yields drop, adding to bearish pressures around USD/JPY
Technical levels
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