We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
Oil - US Crude
Wall Street
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • $EURUSD Daily Pivot Points: S3: 1.0809 S2: 1.0858 S1: 1.0881 R1: 1.093 R2: 1.0957 R3: 1.1007 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • The Hang Seng suffered its worst day since 2015 on Friday on China anti-sedition proposal. Get your market update from @FxWestwater here:https://t.co/CMQ1UTewiF https://t.co/FSeumhbZn3
  • Trump says he will announce action on China before the week is over - BBG
  • Alright, so a breakout higher then in my #WallStreet index despite negative RSI divergence. This may have opened the door to revisiting peaks in average US stock prices from early March. Rising support from mid-May seems to be guiding the index higher (pink line) https://t.co/2dbegpLr7v
  • BOC's Poloz: - Policy from fiscal and monetary side set base for economic recovery - Uncertainty around virus remains -BBG
  • 🇰🇷 Business Confidence Actual: 49 Previous: 52 https://www.dailyfx.com/economic-calendar#2020-05-26
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 1.69% 🇳🇿NZD: 1.60% 🇨🇦CAD: 1.50% 🇪🇺EUR: 0.78% 🇨🇭CHF: 0.65% 🇯🇵JPY: 0.15% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/QHpL43u1ca
  • archive of today's webinar ready to go https://t.co/dCPU3X7BvY
  • Trump says virus vaccines and remedies are going to be here 'very shortly' - BBG
  • Heads Up:🇰🇷 Business Confidence due at 21:00 GMT (15min) Previous: 52 https://www.dailyfx.com/economic-calendar#2020-05-26
Japanese Yen Forecast: Safe-Haven Battle May See USD/JPY Extend Drop

Japanese Yen Forecast: Safe-Haven Battle May See USD/JPY Extend Drop

2020-02-25 12:00:00
Justin McQueen, Analyst

USD/JPY Analysis and Talking Points

  • Equity Market Fallout, FX Reaction Tame
  • Japanese Yen Safe-Haven Qualities Returned?
  • Japanese Yen Undervalued?

Equity Market Fallout, FX Reaction Tame

Yesterday, equity markets posted its largest drop in over 2-years as risk sentiment took a beating from the rising spread of the Coronavirus outside of China. In turn, with market participants evaluating that the impact of the Coronavirus could be significantly larger than initially thought to be the case, which had sparked a re-pricing in risk assets. That said, given the size of the move in global equities the spill-over into FX had been somewhat tame at best with the Japanese Yen yet to make a recoup last week’s breakout.

Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -14% 1% -7%
Weekly -4% 6% 0%
Learn How to Use Sentiment in Your Trading Strategy
Get My Guide

Japanese Yen Safe-Haven Qualities Returned?

Given last week’s price action, the jury had been out as to whether the Japanese Yen had lost its safe-haven appeal with a pullback across equity markets and bond yields failing to coincide with repatriation flows into the Yen. However, reasons for the weakness in the currency could have been on the back of a delayed reaction to the weak Japanese GDP report, while investments flows had highlighted large outflows from Japanese investors into foreign bonds (Figure 1).

Japanese Yen Forecast: Safe-Haven Battle May See USD/JPY Extend Drop

Source: DailyFX, Datastream

Japanese Yen Undervalued?

As US yields (10 year near all-time lows) continue to head lower alongside equity markets, we feel that the Japanese Yen remans somewhat undervalued and has room to play catch up with recent price action. Yesterday’s move did see support in the JPY, however, the 110.00 handle remains to be tested. As such, given that authorities have failed to show notable signs of containing the virus, risks are likely to remain on the downside. Alongside this, eyes will be on the World Health Organisation who have yet to state that the coronavirus is a pandemic, which a decision to confirm could spark renewed selling.

USD/JPY Technical Table




76.4% Fib






Weekly High




YTD Peak

USD/JPY Price Chart: Daily Time Frame

Japanese Yen Forecast: Safe-Haven Battle May See USD/JPY Extend Drop

Source: IG Charts

--- Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.