- EUR/JPY is declining steeply in the European session.
- Major European stock market indexes are experiencing heavy losses.
- Investors are jittery amid nationwide lockdowns fears.
EUR/JPY sold off on Wednesday, slumping to its lowest level in 3 months at 122.20. EUR/JPY trades 0.74% lower at 122.22.
JPY gathers strength on safe-haven flows
Growing concerns that major European economies will impose nationwide lockdowns to stem the spread of covid drag on the sentiment. Germany recorded its highest one-day increase in new covid infections of 14,964. Chancellor Angela Merkel is mulling over the introduction of strict restriction measures.
French President Emmanuel Macron is due to speak later as the country struggles to control the resurgence of covid despite the nightly curfews imposed last week. On Tuesday, France reported 33,417 new daily covid infections with 523 fatalities. The UK reported 22,885 new infections.
risk-aversion is also reflected in European equity indexes. Germany’s DAX 30 Index is down 3.3% so far today and the Euro Stoxx 50 trades -2.7%.
The 10-year US Treasury bond yield is declining for the fourth consecutive day on Wednesday, confirming the flight to safety and lifting the JPY. , EUR/JPY could extend its slide if Wall Street’s equity indices fall sharply on the open as the heavy losses seen in the US stock futures suggests