USD/JPY Retreats Toward 144.00 Ahead of US-China Trade Talks

USD/JPY Retreats Toward 144.00 Ahead of US-China Trade Talks

Dollar Weakens as NFP Momentum Wears Off

The USD/JPY pair slid back to the 144.00 level on Monday as enthusiasm over the strong US Nonfarm Payrolls (NFP) data released on Friday began to fade. Market sentiment turned cautious, prompting a pullback in US Dollar (USD) strength as traders await the next catalyst.

Safe-Haven Yen Benefits from Defensive Mood

The Japanese Yen (JPY) finds support from declining US Treasury yields and a shift in market tone toward risk aversion. Investors are paring back USD long positions, reflecting broader uncertainty ahead of today’s US-China trade negotiations in London.

The Yen, often favored in risk-off environments, is benefitting from the market’s hesitation to take on fresh USD exposure before trade developments become clearer.

US-China Trade Talks Take Center Stage

Market focus has pivoted to the high-level meeting between US and Chinese officials set for later today. The talks aim to revive the diplomatic and trade progress made in Geneva, which led to tariff rollbacks last month.

A positive outcome could shift sentiment and reinvigorate risk appetite, while a breakdown in discussions may add to the Yen’s safe-haven appeal.

What to Watch Next

• Market reaction to any trade headlines emerging from London
• US Treasury yield movements, which could influence USD/JPY
• Upcoming Fed communications and global macro data

Related on Tredu:

• What’s Driving the Japanese Yen in 2025?
• Fed Policy Impact on Major FX Pairs
• US-China Trade Relations Timeline