- USD/JPY on the back foot amid US tariffs news led risk-off.
- USD trades broadly weaker amid falling Treasury yields.
- Focus on the US-China phase one trade deal signing ceremony.
USD/JPY trades modestly flat around 109.90 in the European morning, extending its 20-pips trading range below the 110 level.
Despite the range play, the bias leans towards the downside, as the demand for the safe-haven yen remains underpinned amid jittery markets.
Investors remain wary over the effectiveness of the US-China phase one trade deal, especially in light of the latest Bloomberg report that the US will not remove tariffs on Chinese imports until after the 2020 presidential election.
The cautious market mood can be indicated by the weakness in the US Treasury yields and S&P 500 futures that in turn weigh down on the US dollar when compared to its main competitors.
Adding to the souring risk sentiment are the fresh concerns over JCPOA deal amid a growing rift between the European Union (EU) and Iran. The focus now shifts towards the US Producer Price Index (PPI) data and trade deal signing (due at 1630 GMT) while markets shrugged off the Bank of Japan’s (BOJ) quarterly regional economic assessment report.
USD/JPY Technical levels to consider