USD/JPY seesaws below 105.00, struggles to justify broad risk-off moves

• USD/JPY fails to portray the magnified risk aversion, register modest moves.
• Global policymakers’ efforts to tame coronavirus and its negative implications on the financial markets failed.
• Fitch warned of further risk to structured financial markets, Ohio health officials estimate 100,000 people in the state as infected.
• No catalysts have more importance than the speedily spreading coronavirus.

USD/JPY carries the previous day’s lack of moves, despite broad risk-off, while taking rounds to 104.60/65 amid the initial Asian session on Friday.

Be it US President Donald Trump and Aussie PM Morrison’s multi-billion stimulus or the ECB’s extension of QE, nothing could placate traders from the fears of the coronavirus (COVID-19).

Global markets portrayed the sea of red on Thursday as the deadly virus infected the mainstream media and sports personalities. It’s worth mentioning that the NY Fed’s liquidity infusion through repo actions offered a little help by the end of the previous day. However, that move is yet to be justified as full markets are still absent.

That said, risk barometers dropped heavily across the globe with the equities revisiting multi-year lows and the treasury yields marking losses.

The latest on the pandemic suggests additional burden on the risk-tone as the global rating agency Fitch came out with its warnings while an official from Ohio estimates more than 100,000 cases in the state. Further, the Italian market regulator recently came out with its ban on temporary short-selling of some stocks. Additionally, the US Senate delays decision on the coronavirus relief bill to next week.

Considering the market’s reaction to the coronavirus updates, coupled with a lack of major data/events on the economic calendar, investors are likely to look for anywhere else for catalysts.

Technical Analysis

Thursday’s bullish spinning top needs to be backed by sustained trading beyond 106.10 to regain the buyers’ confidence.