USD/JPY revisits sub-109.00 levels

• USD/JPY hit a session low of 108.98.
• Markets shrug off Trump's "strong USD" comments.

Having faced rejection at 109.77 in Asia, the USD/JPY pair is now struggling to defend 109.00 levels.

Trump team has gone on an offensive earlier this week, stating that a weak USD is good for US economy. Consequently, the greenback was sold across the board. Mnuchin's comments also triggered fears of currency wars.

So, President Trump tried to calm market nerves yesterday by stating that USD will strengthen eventually. The bullish talk put a bid under the US dollar yesterday, helping USD/JPY recovery from 108.53.

However, the retreat from 109.77 to 109.00 levels indicates markets continue to believe the US treasury sees a weak USD as a net positive for US economy.

That said, the pair could regain bid tone if the US Q4 GDP reading due later today shows consumption-driven economic growth.

USD/JPY Technical Levels

The spot clocked a low of 108.92 in Europe and was last seen trading around 109.04. A move above 109.23 (1-hour 50-MA) would expose 109.77 (Asian session high) and 109.93 (1-hour 100-MA). On the other hand, a break below 109.00 (zero levels) would open doors for 108.50 (previous day's low) and 108.27 (Aug. 29 low).