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Jul 02 - 02:36 PM
USD/JPY - COMMENT-Navarro Trade Talk Leaves USD/JPY Probing Support By 108
First appeared on eFXplus on Jul 02 - 12:20 PM

USD/JPY is slipping back with Treasury yields as White House trade advisor Navarro reminds that even though talks are headed in a good direction, getting a good deal will take time.
Markets are dubious about the ability to resume trade talks where they were abruptly broken off in May, with the U.S. policy toward Huawei basically unchanged nW1N23500Y.
USD/JPY's initial post-Trump-Xi trade truce rebound faltered Monday by the downtrend line off June highs and is now probing below 21-DMA and Monday low props at 108.09/08, as 10-year Treasury yields fall back below 2% and toward week ago lows following Navarro's comments.
There is some demand by 108, partly due to large expiries there tomorrow, but Wednesday's biggest expiries are $2.5bln at 107.50.
The yen is more broadly supported today after word the U.S. may raise tariffs on the EU , as perhaps an indication risk-off flows associated with protectionism will persist.
Another sign that global growth fears persist and favor the haven yen and lower U.S. rates that weigh on the dollar is WTI's 3.6% drop despite OPEC+ agreeing a nine-month production cut extension, while gold rebounds 1.5% after yesterday finding support on the multi-year Fibo it cleared last month.

Chart: Click here

Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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