The Japanese yen is trading bearish against the US dollar as its safe haven appeal diminishes after the massive sell-off triggered in global markets in the previous session and the coronavirus fears subside slightly. At the time of writing, USD/JPY is trading at around 108.81.

The risk sentiment in the markets received a bit of a breather on Monday as markets expressed hope that China was taking ample measures towards containing the spread of the virus and protecting its economy from any potential fallout caused by the outbreak. The Japanese yen had been strengthening over the past few days as markets increasingly worried about the coronavirus driving a slowdown in China’s economic growth, and having a spillover effect on other economies worldwide as well.

Although the number of infected patients and the death toll continue to climb higher, markets were comforted by the PBOC stepping in with fresh liquidity injection measures and China vowing to leverage other monetary policy tools to tackle any signs of weakness in its economy.

USD/JPY is also trading bullish on the back of a stronger dollar, which made some gains on Monday after the ISM manufacturing report revealed an expansion in the manufacturing sector in the US during January after five straight months of contraction.