Credit: REUTERS/DADO RUVICNov 12 (Reuters) - Demand for the haven yen evaporated on Monday on hopeful vaccine news , but the prospect of a difficult winter confronting an expanding pandemic means the Japanese currency won't be left out in the cold .
USD/JPY surged from 103.19 to 105.68 on EBS this week, after stocks and Treasury yields soared in knee-jerk reactions to brighter longer term pandemic and economic prospects.
But, it will take time to get any vaccines approved and distributed. In the meantime, markets are starting to brace for difficult months ahead and pricing back in economic risk with lower Treasury yields and wobblier stocks, which has diminished and USD/JPY's upward momentum.
USD/JPY is encountering sellers ahead of major resistance either side of 106 . Thursday's weaker-than-forecast U.S. CPI data also weighed on Treasury yields and shifted the focus back onto the potential for further monetary stimulus, especially with fiscal relief possibly impeded until Jan. 5 Senate election results.
A close below 104.80 would affirm winter's return and the downtrend since March.
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(Randolph Donney is a Reuters market analyst. The views expressed are his own.)
((Randolph.donney@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
