Search ForexCrunch
  • Fresh US-China trade tensions fuel risk-aversion, boost the safe-haven Yen.
  • China’s likely visit to US, however, keeps the losses capped.
  • All eyes remain on trade-related developments amid no fresh US macro news.

The recovery in the USD/JPY pair continues to run into fresh offers near the 110.85 resistance, as markets await the sentiment on the Wall Street fresh trading impulse.

The spot managed to stage a solid comeback from six-week lows reached at 110.30 in early Asia after the US-China trade tensions returned to markets on the US President Trump tweet threat. Trump threatened to hike the tariffs from 10% to 25% on USD 200 billion worth of the Chinese goods as early as this Friday.

On Trump’s tweet, the major opened with a 55″”pips bearish gap and extended the declines to print the lowest levels since March 28th on the 110 handle.

The recent recovery in USD/JPY is mainly because markets still remain expectant of a potential trade deal between the US and China, especially after the Chinese Foreign Ministry said that they are preparing to visit Washington for trade talks.

Meanwhile, the spot fails to find any support from the flat action in the US dollar across its main peers, as the greenback remains unfazed by the US-China trade talks limbo, with the latest week US economic data denting the sentiment.

Looking ahead, the broad market sentiment will continue to dominate the USD/JPY price-action while the pair remains exposed to another leg lower should the Wall Street react negatively to the trade concerns.

USD/JPY Technical Levels