The earlier headline here has helped to push Treasury yields down to session lows, with 10-year yields slipping under 2.00% now falling by 1.5 bps on the day. And that has given USD/JPY a bit more of a nudge lower as the pair falls below the 107.00 handle.
As such, the pair is continuing to make fresh lows since the January flash crash and there isn't too much support that buyers can cling on to from hereon. The 76.4 retracement level @ 106.65 is the next key level to watch with light bids seen around 106.50 but it's going to be all about geopolitical and trade tensions this week.
Despite some negative sentiment now, things can easily swing back around if US and China can get trade talks back on the right foot later in the week or over the weekend. But for now, the less optimistic tone in markets is continuing to add fuel for the yen to push forward with gains today.
The drop here won't appease Japanese policymakers one bit so be wary of potential talk of BOJ/MOF intervention if USD/JPY continues to head south.