USD/JPY hits fresh weekly lows on US/China trade headlines

• Yen consolidates gains on a quiet session and lower US yields. 
• US Dollar loses strength after DXY reached fresh monthly highs but failed to run higher. 

The USD/JPY printed a fresh daily low during the American session amid a wave of risk aversion on US/China trade headlines. The pair dropped to 108.64, hitting a fresh one-week low and then bounced modestly to the upside. 

Bearish pressure prevails 

As of writing trades at 108.75/80, so far it remains above the 108.70/75 support area but still faces downside pressure. A break lower would likely accelerate the decline toward 108.45; below the next support stands at 108.20. 

Price is about to close around daily lows after reports suggested that US-China trade talks are being affected by farm purchases. Those headlines boosted the demand for safe-haven assets further. 

Earlier today, US inflation data and Fed’s Chair Powell comments at Congress were ignored by market participants. During the Asian session, Japanese growth data is due.