EUR/JPY stays in red below 125 as sentiment sours

• European stocks extend losses, Wall Street opens in the negative territory.
• ECB's Draghi reiterates that the Governing Council is ready to adjust all of its instruments.

The EUR/JPY pair recovered from the 124.60 handle in the European morning and started to move sideways near 125 before coming under a renewed pressure in the early NA session. As of writing, the pair was down 0.2% on the day at 124.76.

Pressured by disappointing Q4 earnings results from major corporations in the U.S., Wall Street started the day sharply lower to point to a weakening risk appetite, which helped the JPY gather strength as a safe-haven. At the moment, the Nasdaq Composite is almost down 2% on the day while the DJIA and S&P 500 both lose more than 1%. Additionally, Euro Stoxx 50 and Germany's DAX both extended their slide in the last hour.

Meanwhile, in his introductory statement to the European Parliament, Brussels earlier in the session, Mario Draghi, President of the ECB, reiterated that the Governing Council stood ready to adjust all of its instruments to ensure that inflation starts moving toward their target. "Over the past few months, incoming information has continued to be weaker than expected on account of softer external demand and some country and sector-specific factors," Draghi said to echo his remarks from the ECB meeting last week.

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