USD/JPY sellers look for fresh direction below 109.00

Despite staying under pressure around 108.75, following the first in four-day declines, USD/JPY struggles for a firm direction amid the early Asian morning on Wednesday. The pair earlier portrayed the broad US dollar weakness, amid risk-on, but seems to bear the burden of fresh challenges to the risks off-late.

Although weekend coronavirus (COVID-19) numbers from the global hotspots raised an early hope of recovery from the pandemic, fresh figures from the US, Spain and the UK renewed fears of the deadly disease on late-Tuesday.

New York and the UK mark all-time high death toll, 731 and 786 respectively, whereas Spain bucked the previous four-day losing streak in cases and death toll while flashing a 4% rise in new cases and 743 death toll.

Also weighing on the risk sentiment could be Japanese PM Shinzo Abe’s emergency for six provinces, including Tokyo, as well as the latest cautiously optimistic comments from US President Donald Trump.

Amid all this, the US 10-year treasury yields trim some of their earlier gains to 0.726% by the end of Tuesday whereas US S&P 500 Futures begin Wednesday’s quote in red after Wall Street’s losses.

Moving on, the yen pair traders will keep eyes on February month Machinery Orders and March month Eco Watchers Survey data for fresh impetus. Though, the latest challenges to the risk could renew the US dollar strength and buck the previous declines.

Technical analysis

A horizontal region including multiple tops and bottoms since late-February, around 109.65/70, guards the pair’s near-term advances. On the downside, 21-day SMA near 108.45 can restrict immediate declines.