USD / JPY Falls to One-Month Low Around 106.65

USD / JPY Falls to One-Month Low Around 106.65

• USD / JPY made some sales on Friday in the second consecutive session. • The hedging air took advantage of the safe-haven JPY and was seen as an important pressure factor. • Concerns about the increase of COVID-19 cases concentrated on the US dollar and further contributed to the sales trend. The USD / JPY parity has dropped to a low of one month around 106.25 in the past hour and has now moved well within the striking distance of the lowest swing level of June. The parity contributed to the losses of the previous day and was under heavy selling pressure on the second consecutive session on Friday. The decline was supported by the revival of demand for safe-haven Japanese yen. The recent increase in diplomatic tensions between the USA and China has overshadowed optimism over a potential vaccine for coronavirus disease. This forced the investors to take refuge in traditional safe-haven assets and the global sense of risk that was clearly visible in the stock markets. On the other hand, the US dollar appeared depressed due to concerns that the economic recovery in the US could come to a halt due to the re-increase of new COVID-19 cases. Market concerns rose further on Thursday, with the weekly First Unemployment Claims released, unexpectedly rising to 1.1416 million compared to 1.307 million of the previous week. In addition to the aforementioned key factors, some technical sales below the 106.65-60 support area have been shown to further increase the bearish pressure surrounding the USD / JPY parity. Therefore, some weakness towards the low levels in June around the 106.05 zone seems to be a clear possibility now.