USD/JPY: Reverses lower from 5-day MA as Asian stocks drop

• USD/JPY faced rejection at the descending 5-day average in early Asia. 
• Yen is now gaining ground amid continued risk aversion in stocks. 
• Coronavirus fears continue to dominate the market sentiment. 

The anti-risk Japanese yen continues to draw bids amid persistent Coronavirus-led risk aversion in the financial markets. 

The USD/JPY pair is currently trading at 108.88, representing a 0.12% drop on the day, having faced rejection at the descending 5-day moving average hurdle at 109.06 in early Asia. 

Risk-off

The Asian stocks are again flashing red with Japan's Nikkei leading the way with a400 point or 2% drop. Stocks in Australia, South Korea, and Hong Kong are also reporting losses alongside the 0.5% drop in the futures on the S&P 500. 

Fear that the coronavirus outbreak may turn into a pandemic, derailing the global growth recovery, is likely forcing investors to rotate money out of stock markets and into safe havens like yen. 

As per the latest reports, the death toll in China has risen to 132 and the number of reported cases has topped 6,000. Further, Japan's Chief Cabinet Secretary was out on the wires a few minutes before press time, informing markets that 6 Japanese people, who recently returned from Wuhan, China have tested positive for coronavirus. 

With risk-off showing no signs of abating, the pair risks extending the losses toward the 50-day average support at 108.72 - more so, as traders have ramped up bets for Fed rate cut by November's meeting. The US central bank kept rates steady on Wednesday and reiterated commitment to higher inflation. 

Technical levels