With the Tokyo open responding to the fresh risks due to the coronavirus (COVID-19) USD/JPY dropped to 108.47 amid early Friday.
The yen pair previous dropped due to the broad US dollar weakness based on downbeat data and pessimistic signals from the Fed Chair. The US Centers for Disease Control and Prevention (CDC) took a strong step to control the virus spread during early Asia. The CDC recently modified and extended its earlier version of guidelines to the cruises from no travel to Europe and China to ‘no sail’ order to all cruise ships. In response to this, Tokyo’s index of shares, TOPIX, dropped more than 0.50% to currently down 0.70% to 1,407.
On Thursday, US Jobless Claims, Michigan Consumer Sentiment and fears of economic setback, cited by the Fed Chair Powell, weighed on the US Dollar. In doing so, the greenback pairs a little heed to the Fed’s steps to aid the mid-sized businesses out of already agreed $2.3 trillion packages. Although Japanese markets are open for the day, the rest of the major markets, excluding China, are off due to the Good Friday and the same could restrict the liquidity. On the data front, Japan’s latest March month Producer Price Index (PPI) figures dropped below downbeat forecasts, to -0.9% and -0.4% on MoM and YoY respectively. The next moves could be attributed to the US inflation data up for publishing during the later part of the day.
Sellers will look for entry below 200-day SMA, currently near 108.30, while targeting the monthly low near 106.90.