USD/JPY weakens farther below 109.00 mark, fresh multi-month lows

   •  Trump’s move to slap tariffs on Mexican goods triggers global risk-aversion trade.
   •  The USD weighed down by a slump in the US bond yields, which adds to the selling bias.
   •  Technical selling below 109.00 handle sets the stage for further depreciating move.

The USD/JPY pair continued losing ground through the early European session and weakened farther below the 109.00 handle, hitting fresh four-month lows in the last hour.

The safe-haven Japanese Yen caught some aggressive bids on the last trading day of the week in reaction to the US President Donald Trump's unexpected move to slap 5% tariffs on all goods coming from Mexico. 

This coupled with the overnight reports that China has halted purchases of American soybeans further intensified fears over a global trade war and provided a strong boost to traditional safe-haven assets.

The already weaker sentiment deteriorated further after the official Chinese manufacturing PMI fell back into contraction territory in May and added to the recent worries over the global economic growth outlook.

The global flight to safety was evident from the ongoing slump in the US Treasury bond yields, which affected the US Dollar in a negative manner and further collaborated to the pair's heavily offered tone on Friday.

Adding to this, possibilities of some near-term trading stops being triggered on a sustained break below the 109.00 handle could also be one of the factors behind the pair's latest leg of a slide over the past hour or so.

Technical levels to watch