Kuroda also says that investor risk aversion grew last month due to the coronavirus outbreak
- Paying maximum attention to economic impact of coronavirus outbreak
- Market has faced big fluctuations since the outbreak began
Jokes about volatility aside, I'm sure Kuroda is more than happy with the way the yen has fallen over the past few sessions.
There are plenty of possible reasons for why the yen has weakened considerably over the past two days. Among those that I've seen and heard are:
1) Continued Chinese stimulus to support its economy (whale talk again?)
2) Recession worries in Japan, possibly triggering the BOJ to act
3) Yen's status as a haven under threat amid economic worries caused by coronavirus
4) Technical break above 110.00 and 110.50, triggering stops on the way up
5) Some big money flows ahead of Japanese fiscal year-end next month
As much as one can argue over the many different points above, the chart never lies. The technical breakout is one that no matter what fundamental view you have, you just can't ignore because it makes no sense to do so.
As USD/JPY now flirts with a potential move above 112.00, there are still no hints of an immediate turnaround just yet and so, this isn't the time to pick a bottom in the yen.
There are good and valid arguments for why the recent price action should not be supported, but until the technical picture turns around, that just isn't the focus of the market now.
