USD/JPY thrown back into line by Trump's fanning of trade war angst

• USD/JPY pops to the downside on risk off as Trump tells Treasury to consider another 100B in China tariffs.
• USD/JPY unable to get through the key 107.50 ahead of nonfarm payrolls.

Just as the market was looking ahead for a smooth transition into the European and NY sessions awaiting the nonfarm payrolls, 'in light of China's unfair retaliation', Trump has fanned up the trade war angst yet again where he has instructed the US Treasury to consider another $100bn additional tariffs on China imports.

Trump tells Treasury to consider another 100B in China tariffs - White House

USD/JPY and the Aussie have been reacting the hardest with USD/JPY turning towards the 10710 level from a happy spell in the vicinity of 107.50. Currently, USD/JPY is trading at 107.11, down -0.25% on the day, having posted a daily high at 107.45 and low at 107.08.

This comes at a time where observers were presuming negotiations between the two nations would occur before tariffs would be imposed and we had heard the last of the threats.
There had been a barrage of more positive headlines from overnight, throwing cold water over the escalating trade war tensions between China and the US since the Chinese retaliated with their list and tit for tat tariff applied.

The turn in sentiment had sent the DJIA up around 220 points, or by 0.9%, the S&P 500 index SPX higher by 18 points, or by 0.7% and the Nasdaq Composite Index COMP, putting up a further 32 points, adding 0.5%. USD/JPY had subsequently rallied through key resistances to the aforementioned highs. 

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USD/JPY levels

Valeri Bednarik, chief analyst at FXStreet explained that the short-term and according to the 4 hours chart: "The pair faces now resistance at 107.67, the high established on February 27th. In the mentioned chart, the pair is well above its moving averages that remain directionless, while technical indicators have stalled their advances around at overbought readings, slightly retreating amid lower volumes at this time of the day, than signaling upward exhaustion."