USD/JPY tumbles down to lowest since January as China strikes back with tariffs and more

• China announced new tariffs against the US and will reportedly 
• USD/JPY is trading around 109.20, the lowest levels since late January.
• 108.50 is the next downside target for the currency pair.

China has announced new tariffs on 2,493 items, worth $60 billion worth of annual imports from the US. Moreover, the editor in chief of the Global Times, a Chinese outlet, said that China will also stop buying agricultural products and energy in addition to reducing aircraft purchases from Boeing, and may add further restrictions. The world's second-largest economy may also consider dumping US Treasuries.

Markets are reacting with falling stocks. S&P futures are down around 2%, the US 10-year yield is around 2.41% and USD/JPY is falling to 109.12 at the time of writing, the lowest since January 29th.

USD/JPY Technical Analysis

The daily USD/JPY chart is showing that the pair extends its falls well below the 50, 100, and 200-day Simple Moving Averages. Momentum is clearly to the downside but the Relative Strength Index is below 30, showing oversold conditions.

The next significant support line awaits at 108.50 which was the low point in late January. Further down, 107.75 was a swing low earlier in January and 106.50 is next.

Looking up, last week's low of 109.40 is the first line to watch. The round number of 110.00 is next, and the last level to watch is 111.10.