• EUR/JPY trades in the red as risk-off bodes well for the yen. 
• SIno-US tensions, weak US data weigh over the US and Asian equities. 
• Better-than-expected German PMI is needed to reverse losses in EUR/JPY. 

The anti-risk yen is drawing bids and pushing EUR/JPY lower amid the risk-off tone in the global equity markets. 

At press time, the pair is trading at 123.70, representing a 0.17% decline on the day, having faced rejection at 124.24 on Thursday. 

Asian equities drop

Major Asian equity indices like Nikkei, Kospi, and Hang Seng are trading in the red on Friday, following overnight losses on Wall Street.

The escalating tensions between the US and China seem to have dented risk appetite. 

Beijing said on Thursday that the US' decision to close the Chinese consulate in Houston this week has severely harmed relations and warned of retaliation, injecting nervousness into the equity markets.

In addition, concerns regarding the health of the world's largest economy have been revived by the dismal weekly jobless claims data released Thursday. 

Looking forward, the decline in the EUR/JPY pair would stall if the sentiment in the stock market improves, as suggested by the 0.17% gain in the S&P 500 futures. In fact, the pair could end up reversing the decline seen in Asia if the German and Eurozone preliminary PMI figures beat estimates.

Technical levels