USD/JPY eases from 2-week tops, still above mid-109.00s ahead of US data
- USD/JPY regains positive traction on the back of fading safe-haven demand.
- Positive developments in the coronavirus saga boosted risk sentiment.
- Surging US bond yields underpinned the USD and remained supportive.
The USD/JPY pair climbed to near two-week tops, around the 109.70 region in the last hour, albeit quickly retreated few pips thereafter.
Following an early dip to the 109.30 area, the pair caught some aggressive bets and turned positive for the third consecutive session amid fading safe-haven demand in reaction to reports of more positive developments in the coronavirus saga.
JPY weighed down by risk-on rally
According to Sky News, British scientists have made a 'significant breakthrough' in the development of a vaccine. Separately news on Chinese television said that the research team at Zhejiang University has found an effective drug to treat people with the new coronavirus.
The headlines triggered a fresh wave of the global risk-on rally and the same evident from strong gains across equity markets. This eventually undermined the Japanese yen's perceived safe-haven demand and provided a goodish lift to the major.
Meanwhile, a strong pickup in the US Treasury bond yields reinforced improving risk sentiment and assisted the US dollar to extend its bullish momentum, which further collaborated to the pair's strong intraday positive move of over 40 pips.
The intraday positive momentum, however, started losing the steam and the pair quickly retreated around 10-15 pips after WHO spokesman said that thereare no known effective therapeutics against this coronavirus.
Moving ahead, market participants now look forward to the US economic docket – featuring the release of the ADP report on private-sector employment and ISM Non-Manufacturing PMI – in order to grab some short-term trading opportunities.
Technical levels to watch