The market remains jittery and the confusion is once again rising among investors after a new earthquake hit Japan and the IMF downgraded the outlook for the US economic growth. The jitters sparked the yen gains alongside the dollar as well as they gained against their major peers.

With the lack of fundamentals today the market shifted the focus towards the ongoing events in the market and the fears over the extended weakness of the global recovery. A new 6.6 magnitude earthquake struck Japan's Tohoku region today sparking yen gains on repatriation bets in the market. The yen gained grounds against its major counterparts and rose against the dollar after the earthquake, especially as the IMF also downgraded its outlook for Japanese growth as they expect the damage from the earthquake and tsunami that hit a month ago to amount to around 3-5% of the GDP.

The USDJPY moved south as the Japanese yen gained grounds declining from the intraday highs of 85.15 to the lows of 84.52 and currently hovering around 84.60. Technically, the correction was eminent for the pair to unload the negative momentum over daily basis and the general bullishness will remain valid as far as areas of 83.50 remain intact.

As for the dollar the mixed sentiment gave greenback a push amid a needed correction for the generally weak dollar. The IMF downgraded its expectations for US growth amid the rally in commodity prices and fragile global economic state which added to the uncertainty and haven status of the dollar. Adding to that, the dollar gained grounds after the US government avoided a shutdown after lawmakers agreed on cutting nearly $38 billion of spending cuts.

The dollar index moved higher gauging a stronger dollar against its six major counterparts, where the index recovered from the morning lows of 74.88 to now hover around its highs recorded at 75.08.

On the back of the tension, the euro declined versus the dollar as investors locked on profits stimulated by the prevailing jitters and reassessing the common currency's rally as excessive considering lingering debt woes. The pair declined to the lows of 1.4418 after recording the early intraday highs of 1.4483 and currently hovering around 1.4424. The pair is trading below the critical 1.4440 support areas and a confirmed breach of this level with daily closing below it might force the pair to trend lower delaying the bullishness for now.

The stronger dollar prompted the correction across commodities and affecting crude and gold the most. Investors locked on profits after the gains as the general tension and the news of a cease-fire in Libya pressured crude lower and pulled gold south alongside on eased inflation woes and disturbed crude supply woes.

Volatility is expected to remain high till the end of the session amid the lack of major fundamentals as investors asses the overall outlook for the global economy and the recent rally seen amid optimism.