USD/JPY drops below 104.00 as President Trump's speech fails to stabilize risk sentiment
|- USD/JPY is feeling the pull of gravity, tracking losses in the US stock futures.
- President Trump's speech fell short of expectations and has bolstered risk aversion.
The bid tone around the anti-risk Japanese yen strengthened, pushing USD/JPY lower from 104.40 to a session low of near 103.30 as risk aversion in the US stock futures worsened following the US President Trump's speech.
During his address to the nation, President Trump said that he will instruct Treasury to defer some tax payments and called on Congress to offer immediate payroll tax relief. Trump also promised to provide $200 billion in additional liquidity in the fight against coronavirus.
Investors, however, were expecting stronger stimulus and sold risk following Trump's speech. The S&P 500 futures, which traded 0.5% lower ahead of President's address, are now reporting a 2.4% drop. Meanwhile, the yield on the US 10-year Treasury note is now down over five basis points at 0.76%.
The worsening of risk aversion has so far boded well for the yen. The pair was already on a weak footing following the rejection at 104.80 in early Asia and is now trading around 104.00, representing a 0.45% drop on the day.
With measures announced by Trump falling short of expectations, both equities and USD/JPY could continue to lose altitude during the day ahead. The increasing prospects of an all-out price war between Russia and OPEC members will likely add to the risk-off tone.
Technical levels
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