- USD / JPY is witnessing some selling for the second day in a row on Thursday.
- The drop is due exclusively to some sales around the USD.
- Market optimism and the Bank of Japan dovish could help limit any further decline.
The pair USD/JPY is its constant intraday decline and has fallen to new two-week lows, around the 103.30 region, just before the start of the European session of the jeuves, although it has quickly recovered a few pips from then on. At the time of writing, the pair is trading at 103.46, shedding -0.06% on the day.
The pair has not been able to capitalize on its initial rise and has found new sales near the 103.65 area, moving lower for the second day in a row on Thursday. The US dollar has seen some continuation selling, which in turn has been seen as one of the key factors putting pressure on the USD / JPY pair.
Bassists have also celebrated in weaker tone around US Treasury yields and they do not appear to be affected by the downbeat economic assessment of the Bank of Japan (BoJ). In fact, the Japanese central bank has revised its GDP target for fiscal 2020 to -5.6% from the previous projection of -5.5%.
Having said that, the prevailing sentiment of risk appetite, as shown by the current rally in stock markets, has weighed on the safe-haven Japanese yen and has helped limit deeper losses for the USD / JPY pair. Global risk sentiment has been supported by hopes that the additional US stimulus package under the presidency of Joe Biden will boost economic growth.
Apart from this, comments from BoJ Governor Haruhiko Kuroda have weighed on the JPY and offered some support for the USD / JPY pair. Speaking at the post-meeting press conference, Kuroda has reiterated that the BoJ is closely watching the impact of the coronavirus and will not hesitate to relax its policy further if necessary..
Despite the support factors, the USD / JPY has struggled to register a significant recovery. The lack of buying interest suggests that the short-term bearish bias may still be far from over. Therefore, any bounce could be seen as a selling opportunity, warranting some caution for bull traders.
USD / JPY levels
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