USD/JPY advances to 105.00 area on positive sentiment brought by vaccine news
- USD/JPY is trading in the positive territory on Monday.
- JPY stays under pressure as risk flows dominate markets.
- Moderna says its COVID-19 vaccine candidate is 94.5% effective.
After starting the new week in a calm manner and moving sideways in a narrow band, the USD/JPY gained traction during the European trading hours and advanced to a daily high of 105.12. As of writing, the pair was up 0.25% on the day at 104.90.
During the Asian session, the data from Japan revealed that the Gross Domestic Product (GDP) in the third quarter expanded by 5% on a quarterly basis and beat the market expectation of 4.4%. This report allowed Nikkei 225 Index to close the day 2.05% but had no impact on the JPY's performance against its rivals.
Wall Street looks to open higher on Monday
The improving risk sentiment after Moderna reported that the interim analysis showed its coronavirus vaccine candidate was 94.5% effective made it difficult for the JPY to find demand as a safe-haven. Reflecting the risk-on environment, US stock futures rose sharply and the 10-year US Treasury bond yield turned positive on the day. At the moment, the S&P 500 Futures and Dow Jones Futures are both up more than 1%.
On the other hand, the US Dollar Index, which is currently up 0.12% at 92.82, edged slightly higher on the back of rising T-bond yields and allowed the bullish momentum surrounding USD/JPY to remain intact.
Earlier in the day, the data published by the Federal Reserve Bank of New York showed that that Empire State Manufacturing Index dropped to 6.3 in November from 10.5 in October but was largely ignored by the market participant.
Technical levels to watch for