USD/JPY plunges from 114.50 to a low of 113.90 on the day
We're starting to see a classic case of risk aversion sweep across markets as European indices have erased gains on the day while in FX, the dollar and yen are broadly bid with bond yields tumbling across the board as well.
In Europe, 30-year German bund yields have fallen to turn negative for the first time since late August. Meanwhile, 10-year Treasury yields are down nearly 3 bps to 1.56%.
Going back to FX and USD/JPY, the pair saw a sharp drop 114.50 to 113.90 as safety flows come into play and sellers will be hoping to try and keep a break below 114.00 and the 200-hour moving average (blue line) @ 113.97.
In doing so, the near-term bias will turn more bearish instead but if buyers hold, then they are still able to keep some semblance of the recent upside momentum since last week.
That will be the key battleground for both buyers and sellers now, after the former has failed to really spark the next upside leg above 115.00 earlier in the week.
