USD/JPY tracked Treasury yields and stocks rebounding from coronavirus-inspired lows hit over the last 24 hours nL3N2AP0BC as markets -- particularly record-low Treasury yields and money markets pricing in multiple Fed rate cuts -- appeared to reflect worst-case scenarios.
But tremendous uncertainty remains in markets about the cost of the outbreak spreading beyond China, limiting the scale of any risk rebound.
USD/JPY, after sliding 112.23-109.89 from Thursday to Tuesday, found support near the 21-DMA and 61.8% Fibo of February's rise.
A cluster of potentially daunting resistance awaits around today's $2.6bln of 111 expiries nL2N2AQ0D9 as markets await virus updates.
Expanded closures in Japan and fear the 2020 summer Olympics there might be canceled are dimming the yen's safe-haven allure nL3N2AQ0BP, but there's only 10bp of BOJ easing priced in by year-end due to the drag of negative rates on local banks, savers and pension funds.
This despite clear recession danger nZRN0007Z0.
Key for the USD/JPY is S&Ps holding above their 200-DMA at 3,045 and N225 holding above today's 22,127 low by the 233-DMA and 50% Fibo of the August-January rally.