The sentiment in the global markets turned sour after Trump signed two US bills supporting Hong Kong's pro-democracy protesters. In turn, China foreign ministry said that the bills to be met with strong countermeasures. So far, there are no details on how Beijing may retaliate but it still looks like Trump’s signing of the bills will not derail a phase one trade deal, otherwise financial markets will see an aggressive sell-off across the board.
For now, risk aversion is fairly moderate, which is seen in a subdued demand for the yen and gold . Depending on further developments, USDJPY may get back below the 109.00 handle should investor sentiment deteriorate further. On the downside, the 200-DMA at 108.90 now serves as the immediate support. As long as the pair remains above this area, risks are limited. Of note, US markets are closed today in observance of Thanksgiving. As such, the could pick up during the day amid thin trading volumes.