- USD / JPY drops at Tokyo Open following news about coronavirus.
- US CDC has extended the travel ban to all cruises.
- Unfavorable US data, Fed action and President Powell’s comments weighed on the pair earlier.
With the opening of Tokyo faced with the new risks due to the coronavirus (COVID-19), the USD / JPY drops to 108.47 in the middle of the day on Friday. The previous yen pair fell due to the general weakness of the US dollar, based on optimistic data and pessimistic signals from the Fed Chair.
The U.S. Centers for Disease Control and Prevention (CDC) has taken an important step in controlling the spread of the virus in early Asia. The CDC recently amended and extended its previous version of the cruise directives, from no travel to Europe and China to the ban on sailing all cruise ships.
In response, Tokyo’s TOPIX stock index fell more than 0.50%, and is currently falling 0.70% to 1,407.
Unemployment claims in the United States, Michigan consumer sentiment and fears of an economic setback, cited by Fed Chairman Thursday, weighed on the US dollar on Thursday. In doing so, the greenback takes some account of the measures taken by the Fed to help medium-sized businesses on packages of $ 2.3 trillion already agreed.
Although the Japanese markets are open for the day, the other main markets, except for China, are closed due to Good Friday and this could limit liquidity. On the data front, the latest figures for the March Producer Price Index (PPI) for Japan fell below forecast, to -0.9% and -0.4% respectively in MoM and in year-on-year. The next measures could be attributed to US inflation data which will be released during the latter part of the day.
Sellers will be looking for entry under the 200-day SMA, currently near 108.30, while targeting the monthly low near 106.90.