- EUR/JPY recorded fresh yearly lows near 118.43 during early trade.
- Fresh US tariffs on Chinese products hit the cross via JPY demand.
- US Non-farm Payrolls expected at 170K in July.
The increasing demand for the Japanese currency sunk EUR/JPY to fresh yearly lows in the 118.40 region, where some contention appears to have turned up.
EUR/JPY weaker on Trump’s tariffs
The cross has quickly dropped to levels last seen in April 2017 in the mid-118.00s after President Trump unexpectedly announced late on Thursday an extra 10% tariffs on US imports of Chinese products worth $300 billion.
The announcement rapidly sparked a rush to safer assets – namely bonds and JPY – amidst renewed fears over the global growth. The move in the fixed income space forced yields of the US 10-year reference to drop to the sub-1.84% area, levels last visited in November 2016 pari passu with the slump in USD/JPY to fresh 7-month lows.
Later in the session, the broad risk appetite trends will be in the limelight as July’s Non-farm Payrolls are next of relevance on the docket. Market consensus expects the economy to have created nearly 170K jobs during last month and the jobless rate to remain steady at 3.7%.
EUR/JPY relevant levels
At the moment the cross is receding 0.32% at 118.60 and a breakdown of 118.43 (2019 low Aug.2) would expose 118.23 (monthly low Feb.24 2017) and then 114.85 (2017 low Apr.17). On the upside, the initial hurdle aligns at 120.45 (10-day SMA) seconded by 121.03 (21-day SMA) and finally 121.37 (high Jul.25).
Share
