- Negative climate in the stock markets due to a new variant of COVID boosts the yen.
- The dollar loses strength against the main Europeans due to a drop in Treasury bond yields.
- USD / JPY has the largest daily drop in months.
The USD / JPY is falling more than 125 pips on Friday, with Dow Jones futures targeting an open with a drop of 700 or more than 2%.. The pair bottomed out at 113.64, having started the day near 115.50.
Since the pullback it found support at last week’s lows around 113.69 and bounced back to 114.00. Bearish pressure and high volatility remain, and may continue to favor broad rallies in USD / JPY.
The new variant of South Africa COVID It has raised global concerns and calls for new restrictions on flights from Africa to Europe. This worsened the global climate and pushed investors towards safer assets.
Treasury yields are falling dramatically, which has led to a weakening of the dollar, not only against the yen, but against currencies such as GBP, CHF and EUR. The Japanese currency is the one that rises the most, favored by the search for refuge and the fall in yields.
Technical levels
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