USD/JPY: Bulls back in charge, eye 108 level

USD/JPY is advancing with the US dollar firming up across the board. At the time of writing, USD/JPY is trading at 107.91 having climbed form a low of 107.63 to a high of 107.93. The pair is some 0.2% higher on the session as Asian equities fall away following a poor close on Wall Street.

US benchmarks were folding into the close on a late report from Stat News which threw cold water over an upbeat study which had been released by Moderna about its coronavirus vaccine candidate. US stocks skidded heavily into the final part of the US session and turned negative into the close: Wall Street Close: So much for the COVID-19 vaccine optimism. 

The bullish start to the week was wiped out, almost in its entirety, where otherwise, a promising Phase One study led by the National Institute of Allergy and Infectious Diseases was keeping spirits up. Moderna said it expects a Phase Three trial initiation in July. However, the experimental nature of the test was soon said to not provide the critical data needed to assess its effectiveness, according to the health-focused Stat News report on Tuesday, citing experts. Consequently, the cross has run into offers ahead of the 71 handle. 

Issues noted by Stat included:

- a lack of data about the responses to the medicine from other participants in the 45-subject study

- lack of information about the ages of the eight subjects whose antibodies were analyzed, an important question given the virus is particularly lethal to older people

- lack of comment from Moderna's U.S. government partner on the vaccine, the National Institute for Allergy and Infectious Diseases

- the data is based on early responses to the vaccine, leaving unclear how long any immunity produced by the vaccine might last.

Moderna did not immediately respond to a Reuters' request for comment. The stock price took a beating and plummeted by 10.4% in late Tuesday action to almost pare back a 13% surge on Monday which brought it to a record close. 

And in other risk-off news...

Meanwhile, US President Donald Trump’s four-page letter calling for the WHO to alter its procedures within 30 days or risk a US cut in funding also dented sentiment. Additionally, trade wars are never far away from the front pages of the news. There is also the noise that China has been considering targeting wine, dairy and seafood exports from Australia in what has been described as economic retaliation for Australia’s call for an investigation into the origin of COVID-19.

Fed Chair Jerome Powell who appeared in Congress said to the Senate Banking Committee that the scale and speed of the downturn “are without modern precedent and are significantly worse than any recession since World War II.”

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