USD/JPY looking for cracks in the floor, near 104.80
|- Market sentiment may be flinching at Trump's tariffs, but China sure isn't, responding tit-for-tat with their own tariff threats.
- Lack of macro calendar activity leaves the USD exposed to broad-market selling if sentiment doesn't improve.
The USD is continuing to grind lower against the Yen, trading into the 104.80 level heading into the European markets.
Tight Friday action at the tail-end of the Asia session is keeping the USD/JPY pair from moving too much, but the markets are leaning on the Dollar-bearish side thanks to Trump's tariff brinkmanship.
With Trump's latest round of $50B in tariffs aimed directly at China, the Chinese have responded in short order with a list of duties of their own, and Beijing is geared to square off against the US unless Donald Trump backs down from his own brinkmanship. Exemptions for everyone except China have been granted, but even those are only temporary and set to expire quickly, by May 1st. Trump has expressed a willingness to consider making the exemptions permanent after May 1st, presumably after the EU agrees to different trade terms with the US, and Mexico and Canada make Trump's desired changes to the NAFTA accord.
The macro calendar is an anorexic showing for Friday, and the dominant market themes of risk aversion on trade wars are likely to hang onto the driver's seat to finish off the trading week.
USD/JPY Levels to watch
The pair is heading into the week's close trading at a 14-month low, and a lack of confidence in the US Dollar ahead of deepening trade wars is doing no favours for the Greenback. Support is incredibly thin for the pair, with the only major roadblock to fresh downside sitting at today's low of 104.63, while resistance is priced in at Thursday's swing lows at 105.30 and te 106.00 major level.
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