USD/JPY opened the week well below the trendline connecting Trump’s sudden re-escalation of trade tensions with China sent risk assets lower. The Dow futures fell more than 400 points, pushing the USD/JPY pair lower to 110.28. The index, however, recovered most of its losses by NY close, helping USD/JPY regain poise. The pair, however, failed to retake the rising trendline and is now trading on the defensive at 110.64. With the rejection at the former support-turned-resistance of the rising trendline. The pair, therefore, looks set to test support at 109.70 in the short-term. The bearish outlook would be neutralized if the pair closes above the descending 10-day MA, currently at 111.37.