Late last week, the pair dipped to early-February lows marginally below the 109.50 area and remains in the lower part of the trading range, threatening the lows.
Trump’s aggressive rhetoric towards China spooked investors as well as Beijing’s promise to retaliate. In this conditions, the safe-haven yen outperforms and could extend the rally despite some overbought conditions that emerged after a break below the 110.00 level.
As long as the prices remain below this figure, the pair is bearish and may come under additional selling pressure if the 109.40 region is broken. In this case, the 108.80 support will come into focus. Once above 110.00, USDJPY will target the 110.30 level. At the moment, the downside risks prevail for the greenback.