Throughout the early sessions of the Asian region this Monday (7/13), the USDJPY pair today remains flat yet showing no clear direction of movement. This currency pair is only able to move in a narrow space around 106.84 to 106.94. Possibly because it was early in the week so investors were waiting for the main catalyst.

Meanwhile on Friday last week, the global market was already in consolidation mode. In addition, the risk direction is also still very diverse without a clear direction. That attitude was taken by investors because of fears of a pandemic. Although widely now there are signs of decline throughout the world.

Earlier the pair posted a decline even though USDJPY today is likely to stagnate. Yesterday's decline was caused by a very large increase in US cases. So that brought the Japanese Yen as the belle of the investors. The pair descended from 107.00 towards 106.64 and managed to rise towards 106.94.

There is one factor that can revive the global risk sentiment. The factor was a report from Gilead Sciences that said the anti-virus Remdesivir had given positive testing results. This news if able to develop further could bring USDJPY today to move significantly.

Global Risk Will Influence the USDJPY Movement

But the risks of global problems may weigh on risk appetites. Trade relations between the US and China have reportedly deteriorated again. Even the initial trade agreement yesterday was threatened with failure and collapse.

The further movement of the USDJPY will greatly depend on the direction of global risk. Two parties namely risk on and risk off both have the opportunity to dominate the global market. But one that becomes the market choice will be able to move other global assets.

On Friday last week, the USDJPY currency pair fell deeper just before the opening of the European session on Friday (10/7). In the end, the Japanese Yen was able to extend its dominance and bring the pair down towards the 107 exchange rate.

One factor supporting the recent decline in USDJPY is the risk off the tone that continues to dominate the global market. Since last night, equity also recorded negative performance due to risk off. This is what makes the USD JPY has decreased.

Safe-Haven Yen Can Strengthen Because of the Increasing Pandemic in the US

The risk-averse market atmosphere also seems to be continuously extended during the European session. Because the movement of one risky asset, the S&P 500 contract, remains in a negative bias.

So it can be said broadly that the risk is still very heavy to regain strength. This is certainly very beneficial to the safe haven currency of the Japanese Yen. If this keeps happening, then USDJPY could fall deeper and score a much lower level.

The movement of the US Dollar itself, when faced with risk assets, is able to excel and dominate. Because safe haven actually also benefits the greenback. But no less good when compared to the Japanese Yen as an older safe haven compared to the US Dollar.

One of the causes of this safe haven strength is due to the increase in cases of Corona virus in the US. Conditions that could confound the prospect of a significant US economic revival. In addition to the pandemic problem, risky assets are also under threat due to political upheaval in the US. The increase in pandemics in the US soared so rapidly that it affected the US economy.

The US Supreme Court ruled that Trump's financial records could be seen. So that it can threaten Trump's position as an incumbent if there are suspicious transactions. A longer risk off flow will bring USDJPY down. Although the US Dollar can also rise against risk assets such as global major currencies.