10-year yields are down by 3.7 bps to 2.177%, while US equity are losing about 0.7%, with European stocks are also on the defensive. The risk sentiment deteriorated after Trump announced tariffs on all goods from Mexico, demanding the country curb illegal immigration into the US. This step triggered fresh concerns over the aggressive external policy by the US President. By the way, Mexico has already wowed to retaliate. So, the situation could get even worse down the road.
Against this backdrop, despite some oversold signs in the short-term charts, USDJPY may fall further should the investor sentiment fail to improve any time soon. Technically, the pair needs to get back above the 109.00 handle in order to see a weaker selling pressure.