The USD/JPY pair prolonged its consistent intraday decline and dropped to sparkling two-week lows, round the 103.30 place in the closing hour, albeit rapidly recovered few pips thereafter.
The pair failed to capitalize on its early uptick, alternatively met with some sparkling furnish close to the 103.65 location and became decrease for the 2nd consecutive session on Thursday. The US greenback witnessed some follow-through selling, which, in turn, was once viewed as one of the key elements exerting stress on the USD/JPY pair.
Bearish merchants in addition took cues from a weaker tone surrounding the US Treasury bond yields and appeared as a substitute unaffected via dovish Bank of Japan (BoJ) monetary assessment. In fact, the Japanese central financial institution revised its GDP goal for the fiscal 12 months 2020 to -5.6% from the preceding projection of -5.5%.
That said, the universal risk-on surroundings – as depicted via the ongoing rally in the fairness markets – undermined the Japanese yen and helped restrict deeper losses for the USD/JPY pair. The international threat sentiment remained supported through hopes that extra US stimulus package deal beneath Joe Biden’s presidency will improve monetary growth.
Apart from this, feedback through the BoJ Governor, Haruhiko Kuroda similarly weighed on the JPY and prolonged some guide to the USD/JPY pair. Speaking at the post-meeting press conference, Kuroda reiterated that the BoJ is staring at the affect of the coronavirus carefully and will now not hesitate to ease similarly if needed.
Despite the helping factors, the USD/JPY pair, so far, has struggled to register any significant recovery. The lack of any shopping for hobby suggests that the near-term bearish bias would possibly nonetheless be a long way from being over. Hence, any leap would possibly nonetheless be considered as a promoting opportunity, warranting warning for bullish traders.