USD/JPY: Yen rebounds sharply on GBP debacle-led risk-aversion

The Japanese yen rebounded sharply from fresh five-week lows reached against its American counterpart, as risk-off remains at full steam after the 800-pips collapse in the cable.

USD/JPY: losing sight of 1-4 handle

The dollar-yen pair ended its eight-day winning streak and corrected sharply from multi-week tops amid massive volatility and risk-off trades, triggered by GBP/USD debacle, bolstering the demand for safe-havens such as the yen. USD/JPY is last seen exchanging hands around 103.60 levels, down -0.32% on the day.

Over the last hours, the recovery attempt in the major stalled at 103.80 levels, with the bears tightening the grip and sending the rate back to daily lows, after markets flocked to the safety nets in yen, in wake of the GBP sell-off amid tougher Brexit-related comments from UK finance minister Hollande as well as on suspected ‘fat finger’ news.

Meanwhile, markets appear to have ignored comments from Abe’s adviser Honda, as risk-off market profile dominates USD/JPY trading ahead of the key US payrolls data due later in the NA session.

USD/JPY Technical levels to watch 

In terms of technicals , the immediate resistance is located at 104.16 (5-week tops). A break above the last, the major could test 104.50 (psychological levels) and 105.34 (July levels) beyond the last. While to the downside, the immediate support is seen at 103.00 (round figure), next at 102.66 (100-DMA) and below that at 102.05 (10-DMA).