USD/JPY extends slide to 109.70 amid risk aversion
|- Sharp increase in new coronavirus infections triggered flight-to-safety.
- 10-year US Treasury bond yield erases more than 3% on Thursday.
- US Dollar Index stays calm below 99 ahead of inflation data.
The USD/JPY pair failed to close the day above the critical 110 handle on Wednesday and came under renewed bearish pressure amid resurfacing concerns over the coronavirus outbreak. With risk-off flows helping the JPY find demand as a safe-haven, the pair slumped to a daily low of 109.61. As of writing, the pair was down 0.35% on the day at 109.70.
Coronavirus headlines weigh on sentiment
China has announced that the number of confirmed coronavirus infections rose more than 14K on Wednesday to bring the total number above 60,000. Although this huge jump in cases was reportedly caused by a change in the counting method, the market sentiment turned sour as investors realized that the severity of the outbreak was worse than initially anticipated.
"We understand that new case definition includes clinically diagnosed cases based on symptoms and exposure, as well as lab-confirmed cases," a spokesperson for the World Health Organization (WHO) explained on Thursday but failed to improve the sentiment.
Reflecting the risk-off atmosphere, the 10-year US Treasury bond yield is down 3.7% on the day and major European equity indexes are erasing more than 1%.
In the second half of the day, the US economic docket will feature the Consumer Price Index (CPI) and weekly Jobless Claims data. Markets are likely to keep a close eye on Wall Street's performance.
Technical levels to watch for
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.