FX Action: USD-JPY turned lower
FX Action: USD-JPY turned lower after posting a two-week high of 110.32 during the Tokyo session. A risk neutral sentiment in Asian markets was supplanted by a distinctly risk-off vibe during the European AM session, where stock markets turned quite sharply lower. S&P 500 futures gain up gains and were showing a 0.5% loss, as of the late London AM. Tech stocks led the way lower on European bourses after Google announced it will stop providing China's Huawei with Android services. There was was also a report, stemming from the Nikkei Asian Review, that German chipmaker Infineon had halted shipments to the company. Investors are also bracing for Beijing to take retaliatory measures against the Trump administration's blacklisting of Huawei last week, when it added the Chinese giant and 70 affiliates to its "Entity List," which will bar the company from acquiring components and technology from U.S. firms without government approval. This backdrop rekindled demand for safe havens, including the yen. Assuming that the U.S.-China trade war both deepens and persists, as is looking likely, this would likely set the Yen up for continued bouts of outperformance in the weeks and months ahead. USD-JPY has support at 109.78-80, and resistance at 110.32-35.