USD/JPY on the back foot in Tokyo open following trade talk gloom and doom

The Yen picked up a safe-haven bid as traders and investors moved away from risk-on trade talk update.
US and China make no progress on key trade issues in two days of deputy-level talks.

USD/JPY is opening in Tokyo on the backfoot following the latest headlines surrounding the US and Chinese deputy-level trade talks.

In recent trade, the Yen picked up a safe-haven bid as traders and investors moved away from risk following reports in The South China Morning Post which cited deputy-level trade negotiator's sources saying the following:

US and China make no progress on key trade issues in two days of deputy-level talks, sources say.

The Chinese delegation refuses to talk about forced technology transfers, a core US grievance in the negotiations, a person with knowledge of the meetings says.

High-level talks are expected to last for only one day, with Liu He and his team now planning to leave Washington on Thursday.

FOMC minutes reflected a generally positive outlook

Meanwhile, as explained by analysts at Westpac, "the Sep FOMC minutes reflected a generally positive outlook from policymakers, although "many" thought that low inflation plus the risks from trade wars and the global slowdown justified September’s rate cut. A "few" worried that the market was pricing too much easing, and "several" wanted the statement to have more clarity on when the easing would likely end."

Subsequently, the USD/JPY rose from 107.20 to 107.50/60, following US yields whereby the 2-year treasury yield climbed from 1.42% to 1.47% and the 10-year yield from 1.53% to 1.59%. "Markets are pricing 17bp of easing at the 31 October meeting and a terminal rate of 1.00% (vs 1.88% currently)," the analysts at Westpac explained.

USD/JPY levels

USD/JPY has dropped below the 21, 50 and 200 daily moving averages and is threatening a break below the 107 handle and double bottom support seen in September's business. A break of which will open risk back to the October lows of 106.48. 105 is the ultimate bear target.

Share: Feed news

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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.