USD/JPY challenging session tops near 105.20

• The pair managed to regain 105.00 and above and now tests daily highs.
• USD remains weak within a generalized risk-off sentiment.
• Yields US 10-year reference navigating highs around 2.83%.

USD/JPY has now gathered some upside traction and is now testing the area of daily peaks in the 105.15/20 band.

USD/JPY weaker on US tariffs

Spot plummeted to fresh YTD lows near 104.60 in early trade following heightened risk aversion after President Trump announced $60 billion tariffs on US imports from China.

The move sparked a sell off in the riskier assets and pushed the VIX index (‘panic indicator’) to fresh tops beyond the 25.00 mark, all collaborating in fresh demand for the safe haven JPY.

The ongoing rebound has been in tandem with the bounce off session lows in yields of the key US 10-year reference, flirting with 2.84% after bottoming in sub-2.80% levels.

In the data space, US Durable Goods Orders expanded more than expected in February and New Home Sales came in below estimates at 618K units, or down 0.6%.

USD/JPY levels to consider

As of writing the pair is losing 0.11% at 105.16 facing the next support at 104.65 (2018 low Mar.22) followed by 102.54 (low Nov.3 2016) and finally 101.15 (low Nov.9 2016). On the other hand, a breakout of 106.08 (10-day sma) would open the door to 106.29 (21-day sma) and then 106.64 (high Mar.21).