- USD/JPY extended its consolidative price action for the second straight session on Friday.
- US-China trade uncertainty seemed to underpin the JPY’s safe-haven status and cap gains.
The USD/JPY pair extended its sideways consolidative price action on Friday and remained confined in a narrow trading band around mid-109.00s.
The pair struggled to capitalize on this week's goodish positive move to six-month tops, with fresh concerns about deteriorating relations between the world's two largest economies holding investors from placing any fresh bullish bets.
Focus remains on trade developments
It is worth recalling that the US President Donald Trump on Wednesday signed two bills supporting Hong Kong’s pro-democracy demonstrators, though it is still unclear if it would have any bearing on the "phase one" trade deal.
The latest development led to some uncertainty and has contributed to the prevalent cautious mood around the global financial markets, which eventually underpinned the Japanese yen's safe-haven status and capped any further gains for the major.
Meanwhile, the downside remained cushioned, at least for the time being, in the wake of the latest Japanese industrial production data, which showed that factory activity has fallen to its weakest annual pace in nearly six years.
On the other hand, a subdued US dollar demand, amid relatively thin liquidity conditions, did little to provide any meaningful impetus and led to the pair's lacklustre trading action for the second consecutive session on Friday.
There isn't any major market-moving economic data due for release from the US and hence, the incoming trade-related headlines might continue to act as an exclusive driver of the pair's momentum on the last trading day of the week.
Technical levels to watch
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