- Concerns about the new COVID variant triggers sell off across financial markets.
- Japanese yen among top performers boosted by risk aversion and lower US yields
The USD/JPY is falling sharply on Friday, having the worst day in months after fears over a new COVID-19 variant trigger sharp declines across financial markets. The pair is losing more than 200 pips, trading around 113.30/40, the lowest level since November 10.
The pair opened the slightly below 115.50 and near multi-year highs but then it started to move lower and accelerated again during US hours boosted by risk aversion.
In Wall Street, the Dow Jones is losing 2.60% and the Nasdaq 1.65%. In Europe main indices lost more than 3%. The announcement of travel restriction from Africa to Europe weighed damaged considerably market sentiment boosting the demand for safe-haven assets.
US yields tumbled favoring even more the Japanese yen. The US 10-year that a few sessions ago was flirting with 1.70% is testing 1.50%, the 30-year yield dropped from above 2% to 1.85%.
If USD/JPY consolidates below 113.40, more losses seem likely. The next support level is seen around 113.20 that protects 113.00. Below attention would turn to the November low at 112.70.