On Tuesday, the Japanese yen is trading somewhat bullish against the US dollar amid an emerging risk-off sentiment in global financial markets driven by receding expectations for a US-China trade deal soon. At the time of writing, USD/JPY is trading at around 108.59.

The safe haven appeal of the Japanese yen is back in markets as markets lose hope that the interim trade deal could be signed soon. on Monday, an official in the Chinese government let it slip that China is not too keen on signing a trade deal if Trump doesn’t agree to roll back tariffs in a phased manner as originally planned.

Earlier today, we also heard from the Bank of Japan (BOJ) governor Kuroda about negative interest rates and how the central bank has limitations till when it can cut rates and roll out stimulus measures to support the weakening economy. Kuroda comforted the markets by stating that the BOJ still some tools at its disposal but prolonged easing could impact profitability of financial institutions in the long run.

So far, the Japanese yen has not shown much reaction to Kuroda’s comments and continues to remain in favor as a result of the cautious sentiment in financial markets. This bullishness in the JPY is likely to continue until positive comments on the trade negotiations emerge from either China or the US.