• Declining risk sentiment boosted the safe-haven JPY pressurising USD/JPY.
  • Rebounded from intraday move sub-104.00.
  • US fiscal stimulus optimism could weigh on the USD capping gains.

The USD/JPY moved between minor gains/minor losses in the Asian session. At the time of writing USD/JPY traded flat around 104.10-15.

USD/JPY failed to build on Friday’s gains, instead falling lower amid a deterioration in global risk sentiment, which boosted the safe haven Japanese Yen..

Asia equities declined on Monday following reports that the United States would apply sanctions on at least a dozen Chinese officials for their role in China’s disqualification of Hong Kong legislators.. Optimism surrounding the roll-out of a COVID-19 vaccine limited the downside for USD/JPY.

The pair quickly rebounded from a move under 104.00 further buoyed by a mild pickup in US dollar demand. Optimism surrounding a new coronavirus relief package should limit the US Dollar.

The US economic calendar is quiet today, instead investors will take cues from risk sentiment and US stimulus headlines.