USD/JPY renews multi-month lows at 109.60 as risk aversion continues to dominate
|- The 10-year T-bond yield drops more than 1% following Wednesday's recovery.
- Wall Street looks to open the day in the negative territory.
- Eyes on China-U.S. trade talks today.
The USD/JPY pair closed the previous day below the 110 mark for the first time since early April yesterday and extended its slide today to touch its lowest level since the first week of February at 109.60. Following that drop, the pair staged a modest rebound and was last seen trading at 109.90, losing 0.2% on a daily basis.
Earlier today, China’s Commerce Ministry said that they oppose the unilaterally imposed tariffs of the U.S. and reiterated that they will take "necessary countermeasure" if the U.S. increases the tariff rate. "Trade delegation has already left Beijing and Vice Premier Liu's visit shows China's sincerity," the statement further read. Headlines coming out of today's high-level talks in Washington will be watched closely by participants. If sides fail to reach a deal today, the U.S. is set to hike the tariff rate on $200 billion worth of Chinese imports to 25% from 10% on Friday.
Meanwhile, reports of North Korea firing unidentified projectiles today further escalated the geopolitical tension and ramped up the demand for traditional safe-havens such as the JPY.
In the second half of the day, the Producer Price Index (PPI) and weekly jobless claims data from the U.S. will be looked upon for fresh impetus. Ahead of this data, the US Dollar Index was virtually unchanged on a daily basis at 97.62.
Technical levels to watch for
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