USD/JPY fails to hold above 108 as markets turn risk-averse

US Dollar Index looks to post highest weekly close in more than two years.
Trump is reportedly considering the option to delist Chinese companies from stock markets.
10-year United States (US) Treasury bond yield erases Friday's recovery gains.

Eren Sengezer FXStreet

The USD/JPY pair advanced to a fresh eright-day high of 108.18 during the early trading hours of the American session on Friday but lost its traction amid a negative shift in the market sentiment. As of writing, the pair was virtually unchanged on the day at 107.85.

Trade headlines remain in spotlight

Heightened hopes of the United States (US) and China coming to terms on trade before escalating the conflict any further made it difficult for the safe-haven JPY to find demand. However, after several news outlets reported that US President Donald Trump's administration was considering the option of delisting Chinese companies from US stock exchanges caused the market sentiment to turn sour in the US afternoon. Moreover, Trump administration is also reportedly planning to limit US investors' portfolio flows into Chinese companies.

Wall Street's main indexes, which started the day in the positive territory, turned south with the initial reaction and were now looking to close the day in the red with the Nasdaq Composite erasing 1.3% to lead the losers. Reflecting the risk-averse environment, the 10-year US Treasury bond yield retraced today's rebound and is now in the negative territory as well.

On the other hand, after the data published by the US Bureau of Economic Analysis today revealed that the core Personal Consumption Expenditure (PCE) Price Index, the Federal Reserve's preferred gauge of inflation, rose to 1.8% on a yearly basis in August and helped the Greenback preserve its strength and limit the pair's losses. As we approach the end of the week, the US Dollar Index sits comfortably above the 99 handle and remains on track to post its highest weekly close since April 2017.

Technical levels to watch for

USD/JPY

Overview
Today last price	107.93
Today Daily Change	0.10
Today Daily Change %	0.09
Today daily open	107.83

Trends
Daily SMA20	107.4
Daily SMA50	107.08
Daily SMA100	107.84
Daily SMA200	109.2

Levels
Previous Daily High	107.96
Previous Daily Low	107.42
Previous Weekly High	108.48
Previous Weekly Low	107.48
Previous Monthly High	109.32
Previous Monthly Low	104.45
Daily Fibonacci 38.2%	107.76
Daily Fibonacci 61.8%	107.63
Daily Pivot Point S1	107.51
Daily Pivot Point S2	107.2
Daily Pivot Point S3	106.97
Daily Pivot Point R1	108.05
Daily Pivot Point R2	108.28
Daily Pivot Point R3	108.6

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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