As the Asian session began on Monday, escalating trade tensions between the US and China have driven Japanese yen higher while the Chinese yuan and the Australian dollar weakened. The two nations have failed to make any progress in their talks and Beijing has also vowed to retaliate on the latest tariff hike.

At the time of writing, USD/JPY continues to be bearish and is trading around 109.73. Although, it is slightly higher than the three-month low at 109.47 from last week. According to reports in Chinese media, the government is open to continue discussions with the US but plans to stand its ground on certain important issues.

The US government plans to continue with the higher tariffs even as negotiations continue, until both sides agree on a favorable deal.