Despite a slight improvement in market sentiment surrounding the US-China trade war, the Japanese yen continues to make gains on Tuesday. At the time of writing, USD/JPY is trading at 105.68, as investors remain concerned that the trade dispute remains far from resolved.

Even after somewhat optimistic remarks from Trump that both US and China trade teams are looking to restart negotiations once again, US Treasury yields declined, hiking the demand for the safe haven currency JPY. Even though the US dollar is trading steady, the Japanese yen continues to remain in demand over the high uncertainty in markets currently.

There was another yield curve inversion in US bond yields on Monday, a sign that signals an impending recession. With the trade war on in full swing, traders and investors are worried about whether the US economy will head towards a recession, as signaled by this inversion.