- USD / JPY lost its traction and fell towards 105.00 on Wednesday.
- The safe haven flows help the JPY gain traction against its rivals.
- The US Dollar Index is still on track to close in the red.
The pair USD/JPY it remained relatively quiet near 105.50 for the first half of the day, but was under renewed bearish pressure during the US session as the market’s bad mood helped the JPY find demand as a safe haven. At time of writing, the pair is down 0.35% on the day at 105.10 and is looking to post its lowest daily close since September 22.
Wall Street turns south on Wednesday
In the absence of important macroeconomic data releases and fundamentals, USD / JPY remained in a limited range. However, the negative shift in market sentiment following pessimistic comments from US Treasury Secretary Mnuchin on the possibility of reaching an agreement on the coronavirus relief bill before the election weighed on the pair. .
Reflecting risk aversion, the major US stock indices are down between 0.58% and 1.1% on the day. Additionally, the yield on the 10-year US Treasury bonds fell for the fifth consecutive trading day.
Meanwhile, the US Dollar Index, which fell to a daily low of 93.25, modestly recovered towards the 93.40 area and helped USD / JPY find support.
On Thursday, weekly data on initial jobless claims, the Philadelphia Fed Manufacturing Survey and the New York State Manufacturing Index will be posted on the US economic calendar. Investors will closely follow political developments in the US.
Credits: Forex Street
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