USD / JPY moves away from five-day highs and remains below 105.00

• USD / JPY clings to modest daily gains on Monday.
• Risk aversion helps the JPY remain resilient against its rivals.
• The yield on 10-year US Treasuries is down more than 4%.

The pair USD/JPY It rose to its highest level in five days at 105.06 on Monday, but wiped out a large chunk of its daily earnings during US business hours. At time of writing, the pair was up 0.17% on the day at 104.87.

Risk aversion takes over the markets

The general strength of the USD at the beginning of the week helped the USD / JPY to rise. Selling pressure surrounding major European currencies from concerns about the growing number of coronavirus cases on the continent helped the dollar outperform its rivals. The US Dollar Index, which lost more than 1% last week, saw a decisive rally and rose 0.32% on the day to 93.04.

However, with the flight to safety intensifying in the second half of the day, the JPY began to recoup its losses. Reflecting the bleak market sentiment, the major Wall Street indices fell between 2% and 2.8%, while the yield on 10-year US Treasuries lost 4.6%.

Macroeconomic data from Japan will not be released during the Asian session on Tuesday and risk perception is likely to remain the main driver of USD / JPY movements.

Later in the day, durable goods orders and consumer confidence data from the Conference Board will be placed on the US economic agenda.

Technical levels