USD/JPY slumps below 109 on fresh US-China trade worries
- Reuters says US-China trade deal could be delayed to December.
- 10-year US Treasury bond yield extends losses as market sentiment turns sour.
- US Dollar Index stays flat on the day below the 98 mark.
After spending the majority of the day moving sideways near the 109 handle, the USD/JPY pair came under strong bearish pressure in the last hour as the latest headlines surrounding the United States (US) - China trade conflict triggered fresh risk-off flows and allowed the JPY to find demand. As of writing, the pair was trading at 108.90, losing 0.22% on the day.
US-China trade agreement not a done deal
In an exclusive interview with Reuters, a senior Trump administration official said that the meeting between US President Trump and Chinese President Xi could be delayed until December amid ongoing discussions over terms and venue. "It's still possible the US-China trade pact will not be reached, but a deal is more likely than not," the official added.
The 10-year US Treasury bond yield extended its losses after this development and was last down nearly 2% on the day while Wall Street's three main indexes were down between 0.2% and 0.4%.
On the other hand, the greenback also took advantage of the dismal mood as a safer alternative to European currencies and limited the pair's losses. At the moment, the US Dollar Index is unchanged on the day at 97.91.
There won't be any macroeconomic data releases from Japan on Thursday and the market's risk perception is likely to continue to dominate the pair's price action.
Technical levels to watch for
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.
