USD/JPY: Mildly bid but holds below 108.00 amid broad-based dollar gains
- Risk-off and broad-based dollar strength struggles to lift USD/JPY.
- Talk of "two viruses" in the US seems to have boosted the haven demand for the dollar.
- BOJ is reportedly planning to add more to its existing massive stimulus.
While the American dollar is drawing bids against growth-linked currencies, it is struggling to gather upside momentum against traditional safe havens like the Japanese yen.
The USD/JPY pair is trading near 107.83, representing marginal gains on the day, while the risk-sensitive AUD/USD and NZD/USD are down 0.40% and 0.47%, respectively.
The dollar is drawing haven bids and the futures tied to the S&P 500 are flashing a 0.45% loss in Asia, possibly in response to the comment by the director of the US Centers for Disease Control and Prevention (CDC) that a second wave of the coronavirus outbreak in the fall could be worse than the one we just went through. "We’re going to have the flu epidemic and the coronavirus epidemic at the same time," CDC's Director Robert Redfield told The Washington Post.
The coronavirus outbreak has already claimed more than 45,000 lives in the US and caused massive job losses in America and across the globe.
That said, the coronavirus curve if flattening in the US, UK, and other worst-hit nations of Europe. Further, President Trump is reportedly pushing forward with the plans to restart the economy. As a result, the mild risk-off seen at press time is unlikely to worse, more so, as oil benchmarks, WTI and Brent, seem to have stabilized. The West Texas Intermediate is up nearly 3% in Asia, having declined sharply to negative territory on Monday on oversupply fears.
A Japanese media reported early Thursday that the Bank of Japan (BOJ) is planning to boost its already-massive stimulus program. So far, however, that has failed to inspire aggressive yen selling. Put simply, a convincing break in USD/JPY above 108.00 may remain elusive.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
