- Reuters reports that US and China may not complete the trade deal this year.
- 10-year US Treasury bond yield erases more than 2%.
- US Dollar Index stays near 98 ahead of FOMC minutes.
After advancing to a fresh daily high above the 108.70 mark, the USD/JPY pair lost its traction as the latest headlines surrounding the United States (US)-China trade dispute triggered fresh risk-off flows and ramped up the demand for safe-haven JPY. As of writing, the pair was flat on the day at 108.52.
JPY capitalizes on US-China trade pessimism
Citing experts on trade and people close to the White House, Reuters on Wednesday reported that the trade deal with China could slip into next year. Although the article further noted that December rate hikes could be suspended if talks go well, the 10-year US Treasury bond yield turned south to reflect the flight to safety. At the moment, the 10-year T-bond yield is down 2.7% on a daily basis. Additionally, Wall Street's three main indexes are all down between 0.8% and 1.2%.
On the other hand, the greenback stays relatively resilient against its other major rivals despite the shift in the market mood with the US Dollar Index staying in its daily range near the 98 handle.
The Federal Open Market Committee (FOMC) will publish the minutes of its October meeting at the top of the hour and investors will be looking for fresh clues regarding the near-term policy outlook.
Technical levels to watch for
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