USD/JPY declining as trade war angst pushes traders into safe haven Yen

• Yen is gaining as market sentiment hesitates on mixed Japan data, tariff headline battle.
• BOJ interest rate decisions to introduce some volatility depending on bank's rhetoric.

The USD/JPY is gaining against the US Dollar ahead of the European market session, currently testing below the 106.00 handle with mixed Japanese trade figures and ongoing tensions regarding trade war threats dragging down market confidence and sending traders into the safe-haven Yen.

The Tokyo markets saw mixed numbers come out for Japan, with an upside revision in Japanese GDP figures from the previous quarter were offset by a decline in foreign stock and bond investment. With Donald Trump's plans to enact stiff tariffs on foreign steel and aluminum imports continuing to drag on risk appetite, market sentiment is waffling in the face of trade war angst.

The JPY will see Core CPI figures for January and February Household Spending at 23:30 GMT, With the Bank of Japan's (BOJ)  Monetary Policy Statement and Interest Rate Decision early on Friday at 04:00 GMT. With the BOJ on a hardline easy monetary policy stance until inflation reaches their 2% targets, rate changes are unlikely well into 2019, but traders will be watching the BOJ statement closely for changes to the central bank's rhetoric.

USD/JPY Technicals

The pair has been declining since early January, and the Yen continues to gain ground, and the pair is now trading well below its 200-say SMA. H4 candles have the USD/JPY caught between strong support and a bearish trendline, and a break upwards could see the pair begin to make new highs. Intraday support is currently sitting at 105.50 and 105.25 with resistance at 106.45 and 107.20.