USD/JPY retreats from near 2-week tops, still comfortable above 109.00 mark
- USD/JPY fails to capitalize on the overnight positive move to near two-week tops.
- The JPY benefitted from the prevalent cautious mood and exerted some pressure.
- Sliding US bond yields undermined the USD and did little to lend any support.
The USD/JPY pair edged lower on Wednesday and is currently placed near the lower end of its daily trading range, around the 109.35-30 region.
The pair failed to capitalize on its strong positive momentum witnessed over the past two trading session, rather witnessed some long-unwinding during the Asian session on Wednesday. The pair eroded a part of the previous session's gains to near two-week tops and for now, seems to have snapped two consecutive days of winning streak amid reviving safe-haven demand.
USD/JPY weighed down by coronavirus worries
Despite China's efforts to contain the coronavirus outbreak, the death toll rose to 490 and the number of new cases climbed to 24,324. This eventually weighed on investors' confidence and benefitted traditional safe-haven assets. This was reinforced by a modest pullback in the US Treasury bond yields, which further collaborated to the pair's intraday pullback of around 20 pips.
However, a combination of factors might continue to attract some dip-buying and help limit deeper losses. The prevalent bid tone surrounding the US dollar, underpinned by Monday's upbeat US ISM Manufacturing PMI, coupled with expectations of further economic support from China might turn out to be key factors lending some support to the major, at least for the time being.
Moving ahead, market participants now look forward to a duo of important US macro data, due later during the early North-American session, for some meaningful trading impetus. The US economic docket highlights the release of the ADP report on private-sector employment and ISM Non-Manufacturing PMI, which might produce some short-term trading opportunities.
Technical levels to watch