Yen: JPY Crosses Crater Amid Collapsing Market Sentiment

JAPANESE YEN – TALKING POINTS

Risk assets are under immense pressure so far during Thursday trading session as market participants grow increasingly skeptical over global growth prospects. The latest anti-risk move has sent forex traders seeking safety in the Japanese Yen while equities around the world spiral lower and oil prices plunge.

Bids for havens was sparked by dismal economic data out of Europe and the US which coupled with fears over the impact of an ongoing trade war uncertainty. The dramatic jolt of pessimism is clearly illustrated among JPY currency crosses with USDJPY, EURJPY, AUDJPY, GBPJPY and CADJPY all taking a nosedive.

USDJPY PRICE CHART VS EURJPY, AUDJPY, GBPJPY & CADJPY: 5-MINUTE TIME FRAME (MAY 23, 2019 INTRADAY)

Yen: JPY Crosses Crater Amid Collapsing Market Sentiment

The Canadian Dollar is the worst performing major currency against the Japanese Yen as the loonie swoons in response to collapsing oil prices on the back of slowing global growth. The Pound Sterling has also come under a considerable amount of pressure as the Brexit latest weighs negatively on GBP.

As for the greenback, a bleak US PMI report released earlier exacerbated USD weakness against the Yen with the Euro following suit. Meanwhile, the Aussie continues to drift lower on RBA rate cut bets and trade war risk.

JAPANESE YEN CURRENCY INDEX: DAILY TIME FRAME (DECEMBER 06, 2018 TO MAY 23, 2019)

Yen: JPY Crosses Crater Amid Collapsing Market Sentiment

On balance, the Yen is on track to post its biggest daily gain since the January flash crash measured by the Japanese Yen Currency Index (JXY). The Yen rally could lose steam over the short-term, however, as spot FX rates approach technical levels that have potential to provide support for JPY counterparts. Although, if the recent flareup in risk trends intensifies, Japanese Yen bulls could remain in charge of forex price action.

– Written by Rich Dvorak, Junior Analyst for DailyFX

– Follow @RichDvorakFX on Twitter

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