Amid increased doubts about U.S.-China trade deal prospects, USD/JPY has fallen below Tuesday's 112.58 post-Trump-Xi meeting low.
Indeed, risk-off flows are gaining steam following news of Huawei CFO's arrest nL1N1YA1YR.
USD-bearish ADP, claims, trade deficit and labor cost data are also weighing on Treasury-JGB yields spreads.
This ahead of ISM and NFPs releases as well as an OPEC+ production agreement.
Harder hit than USD/JPY has been AUD/JPY, last -1.3 percent.
AUD remains a liquid proxy for China and trade risks, while the yen, as a cheap-to-borrow funding currency, is getting repatriation and haven bids.
AUD/JPY's daily chart now features a spectacular false breakout above key resistance to begin the week on trade deal hopes, followed by a 3.4 percent plunge.
Today's 81.10 low breaches the Nov 21 pullback low and 50% of the Oct-Dec rise at 81.18/28.
A close below 81.18 could see November's 79.81 low tested.
A surging VIX, falling global stocks and AUD-JPY government bond yield spreads and an overbought bearish divergence top pattern heap tremendous weight on AUD/JPY.
Without some good news on trade, AUD/JPY will crumble, and USD/JPY will test 100-DMA support, last at 112.25 (EBS).
A close below there eyes the 200-DMA at 110.55.