USD/JPY prints six-month low as US yields slide on coronavirus pandemic fears
- Yen is drawing bids as US yields are losing ground.
- Investors are selling risk as coronavirus is beginning to look like a pandemic.
USD/JPY is feeling the pull of gravity with coronavirus-led risk-off in full swing in Asia.
At press time, the currency pair is trading in the red near 105.90, having hit a six-month low of 105.83 a few minutes before press time and a high of 106.34 in early Asia.
The futures on the S&P 500 are down more than 1% and the Asian markets are a sea of red with Japan's Nikkei leading the pack with 3% or 678 point drop.
Meanwhile, the yield on the US 10-year treasury note has dropped to a new record low of 0.892%.
The money is being moved out of risky assets like equities and into safe havens like the Japanese yen and the US treasuries as coronavirus is beginning to look like a global pandemic.
Moreover, investors are getting increasingly worried that the virus will cause far greater damage to the global economy than previously estimated. Further, analysts think the interest rate cuts won't fix broken supply chains or persuade people who are worried about being exposed to the virus to leave their homes.
With virus fears dominating the market sentiment, the USD/JPY could continue to lose altitude during the day ahead. A big relief rally could unfold only if there is a drug breakthrough against the coronavirus outbreak.
Currently, there are “no known” drug treatments against the virus, according to the World Health Organization (WHO).
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.
