USD/JPY slumped to the worst levels......>

DOLLAR-YEN: USD/JPY slumped to the worst levels since Feb, as London traders got

in and looked through the news flow from overnight, prompting the pair to extend

losses. USD/JPY last at Y108.94, 67 pips worse off, with JPY atop the G10 pile.

- Risk appetite took a hit after U.S. Pres Trump tweeted that the U.S. will

impose 5% tariffs on Mexican goods, effective on June 10. Subsequent White House

statement revealed that the tariffs may rise to 25%, if Mexico fails to curb

illegal migrant flows through its border with the U.S. USD/JPY eased to Y109.23

on the headlines.

- The pair fell further after BBG reported that China has prepared a plan to

limit rare earths exports to the U.S. 

- A rehash of comments from ex-PBoC Gov Dai, cited by SCMP, provided brief

reprieve, triggering a knee-jerk higher to Y109.34. Dai said that U.S. Pres

Trump & Chinese Pres Xi will meet in Japan next month.

- Risk events overshadowed Japanese data releases.

- Bears look to the lower 1.0% 10-DMA envelope at Y108.61, while a return above

Y109.00 would shift bullish focus to the 100-HMA at Y109.48.