- US-China trade uncertainty continues to benefit the JPY’s safe-haven status.
- Weaker Chinese macro data helped offset softer Japanese GDP growth print.
- Investors look forward to Fedspeaks for some meaningful trading opportunities.
The USD/JPY pair traded with a negative bias for the fifth consecutive session on Thursday and is currently placed near the lower end of its weekly trading range, around the 108.70 region.
Against the backdrop of growing uncertainty over preliminary US-China trade deal, the prevalent cautious mood continued benefitting the Japanese Yen’s (JPY) safe-haven demand and was seen as one of the key factors behind the pair’s follow-through weakness on Thursday.
Weighed down by reviving safe-haven demand
The already weaker sentiment deteriorated further following the release of disappointing Chinese macro data, though softer Japanese Q3 GDP figures, showing a sharp deceleration in the domestic growth, helped limit any further downside, at least for the time being.
Meanwhile, the US Dollar found some support from a modest uptick in the US Treasury bond yields, which gained some traction after the Fed Chair Jerome Powell told Congress on Wednesday that interest rates will be on hold unless there is a material deterioration in the economy.
It will now be interesting to see if the pair is able to find some support or continues with its recent pullback from multi-month tops as market participants now look forward to scheduled speeches by influential FOMC members for some meaningful trading impetus.
Technical levels to watch
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