USD/JPY holds weaker below 110.00 mark, closer to 3-month lows

   •  Escalating US-China trade tensions continue to underpin JPY’s safe-haven demand.
   •  Weaker US bond yields/subdued USD demand to keep a lid on any attempted bounce.

The USD/JPY pair traded with a negative bias at the start of a new trading week, albeit has managed to rebound around 15-pips from the Asian session swing low.

The pair struggled to build on Friday's attempted recovery move from three-month lows and opened with a bearish gap amid a further escalation in the US-China trade tensions, which continued underpinning the Japanese Yen's relative safe-haven status.

China has vowed to retaliate against the latest US tariffs on around $200 billion worth of Chinese goods, though has now given any details as yet. This coupled with hopes for an eventual settlement helped limit any deeper losses, at least for the time being.

The pair managed to recover a bit from an intraday low level of 109.60, albeit the ongoing slide in the US Treasury bond yields - in wake of Friday's softer than expected US consumer inflation figures, kept a lid on any meaningful recovery.

Weaker US bond yields further weighed on the US Dollar and might further contribute towards capping the pair below the key 110.00 psychological mark amid absent relevant market moving economic releases on the first day of a new week.

Technical levels to watch