USD/JPY pares early gains, turns flat below 109 ahead of US data

• 10-year US Treasury bond yield extends slide amid risk aversion.
• US Dollar Index stays calm below 98 on Friday.
• Coming up: Personal Income, Personal Spending and PCE Price Index data from US.

The USD/JPY pair struggles to make a meaningful recovery on Friday as investors continue to stay close to safe-haven assets such as the JPY amid heightened concerns over the coronavirus outbreak's negative impact on the global economy. After touching a fresh daily high of 109.15 earlier in the day, the pair erased its gains and was last seen trading at 108.95, where it was virtually unchanged on a daily basis.

In addition to the risk-averse atmosphere, the USD's uninspiring performance forces the pair to stay below the 109 mark. The US Dollar Index, which turned south on Wednesday after FOMC Chairman Powell delivered some dovish remarks, is posting losses for the second straight day on Friday and was last down 0.08% on the day at 97.80.

Eyes on US data

During the early trading hours of the American session, the US Bureau of Economic Analysis will release its closely-watched Personal Consumption Expenditures (PCE) Price Index data, which the Federal Reserve uses as its measure of inflation. Additionally, Personal Income and Personal Spending data will be looked upon for fresh impetus as well.

In the meantime, the 10-year US Treasury bond yield is down nearly 1.5% on the day and if stock markets in the US remain on the back foot ahead of the weekend, the JPY could continue to find demand as a safe-haven. 

Technical levels to watch for