USD/JPY has shed 24 pips on risk-off.....>

DOLLAR-YEN: USD/JPY has shed 24 pips on risk-off flows as the U.S. designated

China as a currency manipulator. The rate sits at Y105.72 at typing.

- The early slide allowed USD/JPY to extend Monday's losses, registered on the

back of rapidly escalating U.S.-China trade war. This means that the rate has

given away more than 3 figures only this month.

- Monday saw the rate drop at the Tokyo equity open, as stock markets reacted to

U.S.-China trade developments. Subsequent weak yuan fixing from the PBoC allowed

USD/yuan crosses to break above the key 7.0 level. Pessimism was fuelled by a

BBG report that China asked its firms to suspend U.S. agricultural imports.

USD/JPY then traded either side of Y106.00, closing just shy of the level.

- Y105.00 provides the next bearish target and a break here would bring the YtD

low of Y104.87, touched during the Jan 3 flash crash. Bulls need to reclaim the

lower Bollinger band (3%) at Y105.74 before challenging the Y106.00 handle.

- Japanese earnings/spending figures are due later today, with BoP data coming

up on Thursday and flash GDP due to be published on Friday. Elsewhere, the BoJ

will release the summary of opinions from its latest meeting on Wednesday.