USD / JPY remains negative near horizontal support at 109.35-30

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  • USD / JPY extends post-NFP losses and falls for the second day in a row.
  • A cautious sentiment benefits the safe haven JPY and puts some pressure on the pair.
  • A good recovery in US bond yields benefits the USD and could help limit losses.

The pair USD / JPY remains under pressure during the first half of the European session and remains negative near the horizontal support at 109.35.

The pair has extended Friday’s losses due to a weaker than expected NFP and has seen some selling on the first day of a new trading week. This marks the second consecutive day of fall and it is due exclusively to a sentiment of caution in the stock markets, which tends to benefit the Japanese yen as a safe haven. Having said that, a combination of factors should help limit any further losses for the USD / JPY pair, At least for the moment.

The Latest US Monthly Employment Report has toned down expectations that the Fed will tighten monetary policy sooner rather than later. Having said that, concerns about rising inflationary pressure have acted as a tailwind for US bond yields ahead of this week’s release of the latest US consumer inflation figures on Thursday. This, in turn, has offered some support to the US dollar and it could prevent investors from opening aggressive bearish positions around USD / JPY.

What’s more, Investors remain concerned that an extension of the state of emergency in Tokyo and eight other prefectures could hamper Japan’s fragile economic recovery. This could become another factor that could offer some support for the USD / JPY pair. Therefore, it will be prudent to wait for a solid follow-up to sales before positioning yourself for any further bearish movement amid the absence of relevant US economic releases earlier today.

USD / JPY technical levels

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