- USD/JPY has now drifted into the negative territory for the third consecutive session on Thursday.
- Concerns about rising COVID-19 cases benefitted the safe-haven JPY and exerted some pressure.
- A modest pickup in the USD demand might help limit deeper losses ahead of the US Q3 GDP print.
The USD/JPY pair extended its steady intraday retracement slide from mid-104.00s and has now dropped back closer to five-week tops set in the previous session.
The pair failed to capitalize on its early uptick, instead met with some fresh supply at higher levels and drifted into the negative territory for the third consecutive session on Thursday. As investors looked past the latest BoJ policy update, the Japanese yen was back in demand amid growing market worries about the ever-increasing coronavirus cases.
It is worth reporting that the JPY weakened a bit during the Asian session after the BoJ lowered its growth and inflation forecasts for fiscal 2020/21 at the conclusion of the October policy meeting. In the post-meeting press conference, the BoJ governor, Haruhiko Kuroda said that the central bank is ready to ease monetary policy without hesitation if needed.
Meanwhile, investors remain concerned that renewed lockdown measures to curb the second wave of the coronavirus infections could derail the tepid global economic recovery. Adding to this, European stock markets pared some of their opening gains, which, in turn, extended some support to the JPY's safe-haven status and prompted fresh selling around the USD/JPY pair.
However, a modest pickup in US dollar demand might help limit any deeper losses, at least for the time being. That said, the uncertain US political environment might hold bulls from placing any fresh bets and cap any attempted recovery for the USD/JPY pair. Hence, a subsequent slide back towards September monthly swing lows, around the 104.00 mark, looks a distinct possibility.
Market participants now look forward to the release of the Advance US Q3 GDP report. Any meaningful divergence from the expected figures will influence the USD price dynamics. This, along with the broader market risk sentiment will be looked upon for some short-term trading opportunities later during the early North American session.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?
Gold price is trading close to $2,400 early Friday, reversing from a fresh five-day high reached at $2,418 earlier in the Asian session. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.