Risk-off lifts Yen, pushes USD/JPY lower to 108.20

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  • USD/JPY is trading at session lows near 108.20. 
  • Risk aversion in equities has likely put a bid under the JPY. 
  • Treasury yields are also losing altitude. 

With equities flashing red this Thursday morning in Asia, the anti-risk Japanese Yen is better bid and the USD/JPY is reporting a 0.26% drop. 

The pair has shed 30 pips in the last hour or so to hit a session low of 108.16. 

The futures on the S&P 500 are currently reporting a 0.27% drop. Meanwhile, major Asian equity indices like Hang Seng, Nikkei, and the Shanghai Composite are down at least 0.7% each. 

The equities are reporting losses likely due to lingering trade tensions. U.S. President Donald Trump said on Wednesday he had no specific deadline for a trade deal with China that would allow the world’s second-largest economy to escape 25% tariff on its $300 billion worth of exports to the US, according to Reuters. 

If the risk aversion worsens in Europe, then USD/JPY will likely drop below the psychological support of 108.00. 

It is worth noting that the 10-year treasury yield is already feeling the pull of gravity and will likely add to the bearish tone around the USD/JPY pair. At press time, the yield is trading at 2.10%, having hit a high of 2.18% on Tuesday. 

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