USD/JPY holds weaker below mid-110.00s, Fedspeak eyed
• JPY benefits from reviving safe-haven demand amid escalating US-China trade tensions.
• Subdued USD demand/weaker US bond yields do little to lend any support ahead of Fedspeak.
The USD/JPY pair held on to its weaker tone through the early North-American session, albeit has managed to hold its neck few pips above Asian session lows.
Currently trading below mid-110.00s, the pair continues to be weighed down by global flight to safety amid escalating trade war fears between the world's two largest economies.
The risk-off mood was evident from the ongoing slide in the US Treasury bond yields and a fresh wave of selling pressure around global equity markets, which was eventually seen benefitting the Japanese Yen's safe-haven appeal.
Apart from reviving safe-haven demand, a subdued US Dollar price action, led by the latest Chinese retaliation further collaborated to the pair's weaker tone at the start of a new trading week.
In response to the US President Donald Trump's announcement to impose 25% tariffs on $50 billion worth of Chinese imports, Beijing retaliated by slapping duties on high-value American export products and suspended all previous trade agreements with Trump's administration.
In absence of any major market moving economic releases, broader market risk sentiment continues to act as an exclusive driver of the pair's momentum as traders now look forward to speeches by influential FOMC members for some fresh impetus.
Technical outlook
Valeria Bednarik, FXStreet's own American Chief Analyst writes, “the USD/JPY pair 4-hour chart shows that it holds well above it's 100 and 200 SMA which run parallel in the 109.70/80 region, also above 110.15, the 61.8% retracement of the latest daily slump. In the same chart, technical indicators have lost upward strength within positive levels, the Momentum currently flat and the RSI gaining downward traction around 52, indicating limited buying interest but not enough to confirm an upcoming bearish extension.”