• USD/JPY rebounds from its intraday low but posts a two-day losing streak.
• Market sentiment sours with yields, stock futures fall as Russia-Ukraine woes escalate.
• US Secretary of State Blinken says Russia will invade Ukraine before the night is over, Kiev declares a state of emergency.
• No major data from Japan after holiday, fourth-quarter US GDP, geopolitics crucial for fresh impetus.

USD/JPY remains under pressure around 114.85, down for the second straight day during the first hour of Tokyo’s open on Thursday. The Risk Barometer pair depicts the risky market mood as Japanese traders return from vacation on Wednesday.

Market sentiment has deteriorated at a faster pace recently as Ukraine’s state of emergency adds to widespread talk of the impending Russian invasion of Ukraine. Along the same lines, the latest comments from US Secretary of State Antony Blinken who thought Russia would invade Ukraine before the night was out.

Previously, Ukrainian President Volodymyr Oleksandrovych Zelenskyy mentioned about 200,000 Russian troops near the border while saying, “Today (Russian President Vladimir) Putin did not respond to a request for a phone call.”

Elsewhere, recent upbeat comments from San Francisco Fed President Mary Daly are also weighing on market sentiment amid fears of faster rate hikes. The policymaker cited “more urgency” on rate hikes in his latest speech.

Against this background, Wall Street recorded losses and the S&P 500 Futures also fell 0.40% intraday at the latest. Additionally, 10-year US Treasury yields rebounded in two days falling 1.7 basis points (bps) to 1.95% at press time.

Next, the second reading of fourth-quarter US GDP, expected at 7.0% annualized from 6.9% previously, will join US new home sales for January and personal consumption expenditure details for the fourth quarter (Q4) to decorate the calendar. However, special attention will be given to geopolitics and to Fedspeak for clear guidance.

Technical analysis

A daily close below the 50-day EMA level around 114.75 becomes necessary for the short-term USD/JPY bears to hold the reins.