USD/JPY: Broad dollar weakness skews the risk to the downside

The USD/JPY pair is easing from a daily high of 107.91, now trading near its weekly low at 107.65 as economic reopenings and hopes for a coronavirus vaccine lift the market’s mood, weighing on the greenback, FXStreet’s analyst Valeria Bednarik reports.

Key quotes

“A US biotechnology company, Novavax, announced that it has started human trials of a COVID-19 vaccine in Australia, and expected results from the trial in July. Up to today, there are a dozen different promising vaccines being studied around the world.”

“Japan published its Corporate Services Price Index for April, which resulted in 1.% YoY, worse than the 1.9% expected. The All Industry Activity Index for March declined by 3.8%, also missing the market’s expectations.”

“Given the broad dollar’s on a risk-on mood, the risk for the pair turned to the downside, with further declines expected on a break below 107.30, the immediate support level.”