The USD/JPY pair erased its daily gains and was trading flat near 103.90 during the US session as initial jobless claims rose notably in the previous week.
742,000 Americans filed for first-time unemployment claims last week - breaking a 4-week streak of drops. Continuing claims continued their (now 8 weeks) streak of reductions, falling to 6.372 million from 6.801 million last week.
However, since more lockdowns and restrictions are being imposed in the US and the next round of fiscal stimulus seems miles away, the overall situation might deteriorate pretty quickly.
From other news, existing home sales surged 4.3% month-on-month (vs. a 1.1% expected drop), and September's jump was revised higher to a 9.9% spike. This surprise rise has pushed the yearly jump in sales to 26.6% - the biggest spike since November 2009.
Since the USD/JPY pair failed to hold above the key support of 104, the greenback might continue its decline toward the pre-vaccine lows of 103.20.
Alternatively, if the USD strengthens again, the pair needs to stay above 104 to target another resistance near 104.40.
US bonds are vastly oversold, which might lead to a short-squeeze, and that will force yields lower - which should be negative for the USD/JPY pair.
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