USD/JPY falls to multi-day lows, around mid-107.00s ahead of ADP report
- Worries about global economic slowdown benefitted the JPY’s safe-haven status.
- Falling US bond yields capped an intraday USD uptick and added to the selling bias.
- Investors look forward to US ADP report for some short-term trading opportunities.
The USD/JPY pair lost some additional ground through the mid-European session on Wednesday and is currently placed at the lower end of its daily trading range, around mid-107.00s.
The pair extended the previous session's sharp retracement slide from 1-1/2 week tops and remained under some selling pressure for the second consecutive session amid the prevalent risk-off mood, which tends to underpin the Japanese Yen's safe-haven demand.
Reviving safe-haven demand exerts fresh pressure
Data released on Tuesday showed that the US manufacturing activity contracted sharply in September to its weakest level in over a decade and further fueled fears of slowing global economic growth, which dented on investors’ appetite for perceived riskier assets.
The anti-risk flow was evident from a sea of red across global equity markets. Bearish traders further took cues from a fresh leg of a downfall in the US Treasury bond yields, which eventually kept a lid on a modest US Dollar move up against its major counterparts.
Meanwhile, the recent optimism over a possible resolution of the prolonged US-China trade disputes did little to lend any support, with the global flight to safety turning out to be an exclusive driver of the pair’s ongoing slide to near one-week lows.
Moving ahead, market participants now look forward to the US economic docket, highlighting the release of the ADP report on private-sector employment, which might influence the USD price dynamics and produce some short-term trading opportunities.
Technical levels to watch