USD/JPY takes offers below 115.00 as Russian invasion of Ukraine begins
- USD/JPY prints the heaviest daily fall of the week as risk-aversion amplifies.
- NATO officially confirmed Ukraine’s invasion by Russia, multiple explosions heard by CNN.
- US Treasury yields drop the most in two weeks, stock futures, Asia-Pacific equities are down too.
- Geopolitics is the key, US Q4 GDP will be important as well.
USD/JPY takes offers around 114.70 while printing the biggest daily fall in a week, down 0.25% intraday during Thursday’s Asian session.
The risk barometer pair portrays the market’s pessimism as Russia recently started the much-feared military action targeting Ukraine. The geopolitical play has recently been confirmed by the North Atlantic Treaty Organization (NATO) while CNN marked multiple explosions in Ukrainian cities.
Following that, US President Joe Biden promised “further consequences” for Russia while US Senator Marco Rubio, also the Vice-Chairman of the Select Committee on Intelligence, said that Russian airborne attempts seizing control on Kyiv airport.
Amid the influx of risk-aversion, the US 10-year Treasury yields snap two-day rebound by declining around nine basis points (bps) to 1.88% whereas S&P 500 Futures drop over 1.8% by the press time. It should be observed that the US Dollar Index (DXY) rises 0.38% intraday due to its safe-haven appeal at the latest.
Moving on, further geopolitical plays will be critical to watch for the USD/JPY sellers. However, any surprises will have to rely on the second reading of the US Q4 GDP, expected 7.0% annualized versus 6.9% prior, for further clarification.
Technical analysis
A clear downside break of 50-day EMA level surrounding 114.75 directs USD/JPY towards the weekly bottom of 114.50. Alternatively, the 21-day EMA level of 115.05 restricts immediate upside.