• Dismal German/Euro-zone manufacturing PMIs prompts some aggressive selling in the last hour.
• Deteriorating risk sentiment underpins JPY’s safe-haven demand and adds to the bearish pressure.
• Technical selling below the 125.00 handle likely to expose the recent daily closing lows support.
The EUR/JPY cross tumbled to near two-week lows, below the key 125.00 psychological mark in wake of the latest disappointment from German/Euro-zone manufacturing PMI prints.
The cross extended this week's retracement slide from the 127.00 neighbourhood, or over two-week tops, and met with some aggressive supply following the release of awful German manufacturing PMI, showing that factory activity slipped deeper into contraction territory in March.
German 10-year bond yields turn negative for the first time since October 2016 in reaction to the dismal PMI data and weighed heavily on the shared currency, which was further pressurized by the fact that composite Euro-zone manufacturing PMI also fell to a 71-month low level of 47.6.
Meanwhile, dismal German/Euro-zone data helped reignite global growth worries and dented investors' sentiment for riskier assets. The same was evident from a sharp intraday downturn in European equity markets, which further underpinned the Japanese Yen's safe-haven demand and added to the selling bias.
With today's steep decline, the cross has now erased a major part of the previous session's goodish gains and seems all set to end on a downbeat note for the second week in the previous three, paving the way for a move back towards challenging the recent daily closing lows support near the 123.70-65 region.
Technical levels to watch
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