USD/JPY holds key Fib support, but relief may be short-lived
|- USD/JPY is hovering around key Fibonacci level of 106.11.
- A big bounce is likely to remain elusive as markets are pointing to sustained risk-off.
- The US 10-year yield has hit fresh record lows.
USD/JPY is looking to chart an oversold bounce in Asia, having bounced from under 106.11 - the 61.8% Fib retracement of Aug-Feb rally - during the overnight trade.
The currency pair hit a session high of 106.34 a few minutes before press time and is currently trading at 106.15. The pair printed a six-month low of 105.97 during the US trading hours, as Wall Street tanked, boosting haven demand for the anti-risk Japanese yen.
The S&P 500 fell by 3.39% as investors reassessed how much negative impact coronavirus would have on the economy and if rate cuts by the Federal Reserve would cushion the economy and markets. Also, the US 10-year treasury yield declined from 1.06% to 0.897%.
At press time, the futures on the S&P 500 are reporting a 0.10% drop and the 10-year yield is trading at a fresh record low of 0.892%.
As a result, the USD/JPY pair may have a tough time charting a notable bounce and could find acceptance under the key Fibonacci support at 106.11.
Japan's Finance Minister Taro Aso was out on the wires earlier today assuring markets that the government will take necessary steps depending on the urgency of the situation. Aso's comments, however, did not have any impact on the JPY pairs.
Technical levels
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.