USD/JPY is trading steady as the US dollar and the Japanese yen remain in favor over confusion in the markets surrounding US-China trade tensions. At the time of writing, USD/JPY is trading at around 108.50.

Mixed signals surrounding progress in trade talks have sent markets into a tizzy lately, with US President Trump declaring that negotiations were progressing well but again reminding China of re-imposition of tariff hikes in case China doesn’t sign the interim trade deal with the US soon.

According to Trump, trade negotiations were moving along but if the trade deal does not get signed, he will consider raising tariffs again on Chinese imports. Any further tariff hikes could drive more weakness in global economic growth.

The US dollar, meanwhile, is trading steady ahead of the FOMC meeting minutes as markets are expecting positive signals from the Fed about the health of the US economy and an upbeat future outlook. The Japanese yen also remains supported as a risk-off sentiment in global markets is driving the safe haven appeal of the currency higher.