USD/JPY bears cheer five-day losing streak while attacking 105.00 on the Fed’s day

USD/JPY drops to 105.00 as Tokyo opens for trading on Wednesday. The yen pair stays depressed near the multi-day low as risk-tone remains heavy amid a lack of progress in the US policymakers’ negotiations over the much-awaited fiscal package. Also weighing on the pair could be the coronavirus (COVID-19) woes and market expectations of dovish comments from the US Federal Reserve (Fed) Chairman Jerome Powell during today’s post-Federal Open Market Committee (FOMC) meet.

Pessimism is all-pervasive…

Be it the American Senators’ inability to agree over the trillion-dollar worth stimulus or the losses due to the pandemic, not to forget the US-China tussle, many catalysts are supporting the current risk-off momentum. As a result, the USD/JPY pair, considered as a risk barometer, dwindles to the lowest since early-March.

Early in Asia, US House Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows cited differences among the policymakers over the details of phase 4 COVID-19 bill. Other than the delay in decision-making, nearness to the expiry of unemployment claim benefits also magnifies the market pessimism.

Elsewhere, US President Donald Trump pushed hard to rekindle vaccine hopes and the Fed also played their part while extending expiries of the previously announced stimulus measures. However, nothing could beat the virus woes as global numbers rose past-16.00 million.

Against this backdrop, Wall Street closed in negative on Monday whereas the US dollar’s gains from two-year low also failed to defy the USD/JPY. Further, the US 10-year Treasury yields remain depressed around 0.58% with Japan’s Nikkei 225 down 0.50% to 22,545 by the press time.

Moving on, global markets may witness the pre-Fed trading lull but risk catalysts may offer intermediate moves. Also important will be comments from the BOJ policymaker who may shed light on the Japanese central bank’s easy stand amid the pandemic.

Technical analysis

Only if the bulls manage to close beyond June month’s low around 106.10, they can look for the early-month top beyond 108.00. Until then, March 11 low near 104.10 and 102.70 may entertain the bears ahead of the yearly bottom surrounding 101.20/15.