USD/JPY closes back in on 112.60
China’s upbeat comments on trade earlier isn’t enough to lift the gloom in markets on the day as risk is starting to slide once again. Things are certainly not helped by oil’s decline by over 3% on the day following OPEC members’ comments in the past hour but in general, the recovery in risk has been rather mild.
E-minis have been on a slide over the last two hours and now trades at the lows down by 1.5%. Meanwhile, Treasury yields have also started to fall again with 10-year yields now down 2.5 bps to 2.88%.
As a result, it’s helping to fuel further bids in the Japanese yen and most yen pairs are falling to the lows for the day once again. USD/JPY is now closing back in on the 112.60 handle as it moves towards a test of the low @ 112.58 where a double bottom was formed earlier.
It sure isn’t looking pretty for risk ahead of US trading and the worry here is that it’ll translate into a deeper rout when the cash equity market opens later. It could still get even uglier from here so best be prepared.