USD/JPY: Risk aversion returns ahead of fresh US-China trade talks

  • USD/JPY trades near 110.50 before the European session starts on Tuesday.
  • Latest news signaling fresh US-China trade talks renewed risk aversion.
  • 110.65 continue to limit the pair’s immediate upside with 110.25 acting as adjacent support.

The USD/JPY pair trades little changed around 110.50 during early Tuesday. The pair witnessed pullback since early Asian session as traders rushed to risk safety ahead of fresh US-China trade talks after the US market was closed on Monday. Adding to the sentiment were comments from China’s Vice Premier Han Zheng that signaled the need for tax cuts to relieve pressure on the economy.

The US markets were closed on Monday due to President’s Day holiday and investors were left with few updates on the trade developments as the US delegates return from Beijing on late-Friday. During initial Tuesday, Reuters reported that the White House Press Secretary Sarah Sanders signaled fresh US-Sino meeting on February 19th, led by the US Trade Representative Lighthizer and will be attended by the US Treasury Sec. Mnuchin, Commerce Secretary Ross, White House Economic Adviser Kudlow and White House Trade Adviser Navarro.

The news report also said that the trade talks will focus on "needed structural changes in China that affect trade" as well as China's pledge to purchase "a substantial amount of goods and services from the US".

In another news report from the Reuters, it was mentioned that the Chinese Vice Premier Liu He will be In Washington on February 21st and 22nd to continue the trade negotiations.

The news of internal talks between the White House policymakers is likely to take a toll on on-going Sino-US trade negotiations mainly due to tough demands from the US, which in-turn triggered risk aversion across the board.

Additionally, the Chinese official People’s Daily newspaper reported the latest comments from Vice Premier Han Zheng on Tuesday, as he said that Beijing needs to cut company taxes and fees as an important part of fiscal policy.

Investors may now focus on the trade developments in order to determine trade and risk sentiment as the US traders return to markets after an extended weekend.

USD/JPY Technical Analysis

Failures to surpass 110.65 can drag the USD/JPY pair towards 110.25 and then to 110.00 whereas 109.60 could appear on sellers’ radar afterward.

On the upside, a clearance of 110.65, 111.00 and 111.15 may entertain buyers ahead of pleasing them with a 200-day simple moving average figure of 111.30.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD extends gains to 1.1200 on sliding US yields

EUR/USD is trading close to 1.1200, in the wake of the European session as US yields continue falling. The European Parliament elections are in play and US durable goods are eyed.


GBP/USD off the highs as May announces stepping down on June 7th

GBP/USD is trading below 1.2700 after a quick rise to the upside as UK PM Theresa May announced she will step down on June 7th with Boris Johnson set to take over.


USD/JPY hangs near 1-week lows, just below mid-109.00s

The USD held on the defensive despite a goodish bounce in the US bond yields. Escalating US-China trade tensions continue to underpin JPY’s safe-haven demand. Traders now look forward to the US durable goods orders for some fresh impetus.


Gold consolidates in a range below weekly tops set on Thursday

Gold held steady through the early European session on Friday and was seen consolidating the overnight strong up-move to weekly tops.

Gold News

US Durable Goods Orders Preview: Sentiment is not enough

Durable goods orders expected to drop sharply after a strong March. Business investment thought to cool following the best quarter in nine months. Goods orders ex-transport have slowed despite strong consumer sentiment readings.

Read more