USD/JPY clings to gains near 104.80, looks to snap five-day losing streak
- USD/JPY staged a decisive rebound after dropping to 104.00.
- Wall Street's main indexes are suffering heavy losses on Monday.
- US Dollar Index registers strong daily gains near 93.70.
The USD/JPY slumped to its lowest level since March at 104.00 on Monday as the JPY continued to capitalize on risk-off flows. However, the broad-based USD strength allowed the pair to stage a decisive rebound in the second half of the day. As of writing, USD/JPY was up 0.23% on a daily basis at 104.80.
DXY climbs to multi-week highs on Monday
Reflecting the dismal market mood amid renewed concerns over rising coronavirus cases causing a shaky economic recovery, major global equity indexes started the new week on the back foot. Germany's DAX 30 Index lost more than 4% on Monday and Wall Street's main indexes started the week deep in the negative territory. At the moment, the S&P 500 Index is down 2.3% on the day.
On the other hand, the greenback also took advantage of the risk-averse market environment and gathered strength against its rivals with the US Dollar Index (DXY) rising to its highest level in more than a month at 93.78.
Meanwhile, the 60-pip spike seen in the early American session despite a lack of fundamental trigger paved the way for speculations about a possible Bank of Japan (BoJ) currency intervention.
There won't be any macroeconomic data releases featured in the Japanese economic docket on Tuesday. Later in the day, FOMC Chairman Jerome Powell and US Treasury Secrtary Steven Mnuchin will testify before the House Financial Services Committee.
Technical levels to watch for