USD/JPY struggles to rebound above 110 as DXY extends slide
- USD selloff intensifies in American session on Thursday.
- US Dollar Index drops to fresh 8-day lows below 99.70.
- Wall Street's main indexes extend rally despite record increase in US Jobless Claims.
The broad-based selling pressure surrounding the USD caused the USD/JPY pair to break below the 110 mark on Thursday. As of writing, the pair was erasing 1.35% on a daily basis at 109.68.
USD selloff picks up steam
The US Dollar Index (DXY), which tracks the USD's value against a basket of six major currencies, extended its slide and was last seen down 1.27% on the day at 99.65. Today's data from the US showed that a record number of 3,283,000 people applied for unemployment benefits in the week ending March 21.
However, the market reaction to this reading was surprisingly muted and the USD came under a renewed selling pressure during the American session with major equity indexes in the US rising sharply after the opening bell. At the moment, the Dow Jones Industrial Average is up 5.5% on the day and the S&P 500 is adding 4.9%.
Meanwhile, other data from the US showed that the real Gross Domestic Product (GDP) in the fourth quarter expanded by 2.1% (third estimate) on a yearly basis to match the previous reading and analysts' estimate.
Although the JPY usually struggles to find demand in risk-on environments, the USD weakness seems to be overwhelming the pair for the time being.
The only data featured in the Japanese economic docket on Friday will be Tokyo CPI figures and the USD's market valuation is likely to continue to impact the pair's movements in the near-term.
Technical levels to watch for