USD/JPY plummets below 107.60 area after Trump announces additional tariffs on China

• US President Trump says additional 10% tariffs on Chinese imports will kick off on September 1.  
• US 10-year Treasury bond yield erases more than 5% on Thursday.
• US Dollar Index turns red on the day below the 98.50 mark.

The USD/JP pair came under strong bearish pressure in the last minutes and slumped to its lowest level since July 22 at 107.57. As of writing, the pair was trading a few pips above that level, losing 1.05% on a daily basis.

Following this week’s high-level talks in Shanghai, US President Donald Trump today announced that they will impose a 10% tariff  on the remaining Chinese imports worth $300 billion starting September 1. Although Trump finished the announcement with: “We look forward to continuing our positive dialogue with China on a comprehensive trade deal, and feel that the future between our two countries will be a very bright one,” a fresh wave of flight-to-safety hit the markets.

10-year US T-bond yield drops to lowest level since November 2016

Reflecting the risk-off atmosphere, the 10-year US Treasury bond yield extended its slide and was last seen losing nearly 7% on the day. Falling T-bond yields also weighed on the Greenback and the US Dollar Index was last down 0.2% on the day at 98.38. Furthermore, Wall Street’s main indexes erased their early gains and both the Dow Jones Industrial Average and the S&P 500 turned red on the day.  

Technical levels to watch for