The market optimism over the Chinese officials’ comments on stimulus has evaporated on Tuesday and gave way to renewed political fears. As a result, the risk-off sentiment is driving stock markets lower, while the Japanese yen             safe-haven demand has surged significantly.

The US-Saudi tensions, Italian budget issues, Brexit woes and trade-war fears propel the safe haven assets higher, with yen is the main beneficiary in this environment. As such, the USDJPY             pair is re-treating after two days of gains, being rejected from nearly two-week highs marginally below the 113.00 handle.

Considering the depth of investor worries and the growing concerns over the political chaos globally, the risk-off trade will prevail in the markets in the medium term, while moments of relief will likely be short-lived. In this context, the Japanese currency has a bullish potential, with spikes in the pair look like selling opportunities. Moreover, the bearish pressure on USDJPY             could intensify should the Fri-day’s US Q3 FGP numbers disappoint.