• USD/JPY witnessed some aggressive long-unwinding trade on Thursday.
  • Persistent USD selling bias seemed to exert some heavy bearish pressure.
  • Reviving safe-haven demand benefitted the JPY and contributed to the slide.

The USD bearish pressure remained unabated through the early North-American session and dragged the USD/JPY pair below mid-109.00s in the last hour.

The latest optimism over the passage of a massive $2 trillion US stimulus package failed to provide any respite to the US dollar, which remained depressed on the back of the Fed’s aggressive move to buy unlimited Treasuries and mortgage-backed securities.

The selling pressure surrounding the greenback aggravated further after the Fed Chair Jerome Powell, in an interview this Thursday, told NBC Today that the US central bank still has room for more action to combat coronavirus crisis.

This coupled with a record leap in the US initial weekly jobless claims for the week ended March 20 and a fresh leg down in the US Treasury bond yields did little to provide any respite to the USD bulls or stall the pair’s intraday downfall.

On the other hand, the Japanese yen benefitted from reviving safe-haven demand amid the prevailing caution mood in the equity markets, all against the backdrop of mounting fears over an imminent global recession.

Apart from this, possibilities of some short-term trading stops being triggered below the key 110.00 psychological mark could also be one of the factors that might have contributed towards accelerating the slide since the mid-European session.

It will now be interesting to see if the pair is able to find any support at lower levels or the ongoing slide confirms that a near-term top is already in place, setting the stage for an extension of the corrective slide from one-month highs set on Tuesday.

Technical levels to watch