USD/JPY: RECOVERED ON THE "TARIFF DELAY" NEWS...BUT IS THE RECOVERY SUSTAINABLE...??

The pair USD/JPY spiked from the 105.00 region to 106.97 in the yesterday's US session after the US government announced a delay in tariffs on some of Chinese imports until mid-December. Tariffs on Chinese goods are being delayed to Dec. 15, while certain products are being removed due to “health, safety, national security and other factors,” a statement said overnight. US President said “We’re doing this for the Christmas season. Just in case some of the tariffs would have an impact on U.S. customers.” Such comments imply that, this sudden change in the stance  is not a result of progress in US-China trade talks but instead pressure from US businesses. The dollar also received a much needed boost from US consumer prices,  as it  rose 0.3% in July as the year-over-year rate hit 1.8%, up from 1.6%. with that the CPI is moving back toward the Fed’s inflation target. But the safe haven Yen is seen holding its fort against the U.S. dollar, as investor sentiments are still not fully convinced on the back of geo-political issues like  political unrest in Hong Kong, Brexit and Iran situation as well.Also a weaker-than-expected Chinese data released earlier in the day  provided additional boost to the safe-haven yen. On the technical charts the pair is still  facing downside pressures after failing to break  above the former support-turned-resistance of 106.78. So in order for the recovery to be sustainable needs to get more clarity on all fronts.

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