USD/JPY struggles to hold 142.00 as US-China trade war batters US Dollar

• USD/JPY sees more downside below 142.00 dur to significant weakness in the US Dollar.
• US President Trump aims to reduce dependency on China for vital minerals.
• Investors await Fed Powell's speech and the Japan's National CPI data for March.

The USD/JPY pair struggles to hold the key support of 142.00 during North American trading hours on Wednesday, the lowest level seen in over four months. The pair faces selling pressure as the US Dollar has been hit hard by intensifying trade war between the United States (US) and China.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, falls back to near 99.50 after a short-lived recovery move to near 100.00 on Tuesday.

The tariff war between the US and China has escalated further as President Donald Trump vows to reduce dependency on China for critical minerals, which have application in various industries, including defense and technology. The tussle between Beijing and Washington started when the former retaliated against the imposition of reciprocal tariffs by Trump, which have now increased to 125%.

Meanwhile, growing expectations that the Federal Reserve (Fed) will cut interest rates aggressively this year have also weighed on the US Dollar. For fresh cues on the interest rate outlook, investors await Fed Chair Jerome Powell's speech, which is scheduled at 17:30 GMT.

On the Tokyo front, investors await the National Consumer Price Index (CPI) data for March, which will be released on Friday. The inflation data will influence market expectations about whether the Bank of Japan (BoJ) will cut interest rates in the May policy meeting. Economists expect the Japan National CPI ex. Fresh Food to have risen at a faster pace of 3.2%, against 3% increase seen in February.