USD/JPY trades with modest losses, just below 112.00 mark

   •  A subdued USD price action fails to assist the pair to build on the recent positive move. 
   •  US-China trade optimism undermines JPY’s safe-haven status and helped limit the downside.

The USD/JPY pair traded with a mild negative bias through the Asian session on Tuesday, albeit remained well within the previous session's narrow trading range.

The pair continued with its struggle to sustain/build on the momentum beyond the 112.00 handle, with a combination of factors contributing to sideways consolidative price action for the second consecutive session on Tuesday.

The overnight uptick, supported by upbeat NY Empire State Manufacturing Index, lacked any strong conviction and remained capped amid the prevalent US Dollar selling bias on the back of the US President Donald Trump's latest criticism of the Fed's policy tightening.

The negative factor, to a larger extent, was offset by growing optimism over a possible US-China trade deal, which undermined the Japanese Yen's safe-haven status and turned out to be one of the key factors that might continue to help limit any meaningful downside. 

In absence of any major market moving economic releases, the pair seems more likely to continue with its subdued/range-bound price action ahead of this week's more relevant macro data from the US. 

Technical levels to watch