The Nikkei is down by over 1%, headed for its worst day this month
The slightly more defensive risk tilt coincides with the news that Tokyo is reporting a record number of daily virus cases here. While the news isn't too major, it serves as a reminder of the contrasting narratives in the market despite vaccine optimism on Monday.
S&P 500 futures has also fallen by 0.4% now as the Nikkei is slumping by over 1% heading into the close and looks set for its worst trading day this month so far.
Elsewhere, 10-year Treasury yields have also fallen a little by over 1 bps to 0.844%.
That is pinning USD/JPY lower to a session low of 103.96 ahead of European trading.
Elsewhere, the dollar is keeping more mixed as it also trades lower against the euro and pound, but keeping a little higher against the aussie to start the new day.
Once again, key technical levels there are still largely intact with EUR/USD keeping below 1.1900 and GBP/USD below 1.3300.
Back to USD/JPY, the pair continues to be driven by the downwards channel and is retesting the pivotal 104.00 level again now. For sellers, targeting a break/close below that will be key to drive further momentum towards the month's lows @ 103.18-19.
