USD/JPY continues scaling higher, hits fresh multi-week tops
- US-China trade optimism continues to weigh on the JPY’s safe-haven status.
- Rising US bond yields underpinned the USD and contributed to the up-move.
- Traders look forward to the US PPI print for some short-term opportunities.
The USD/JPY pair climbed to fresh six-week tops in the last hour, with bulls now eyeing a move towards reclaiming the 108.00 round figure mark.
The pair continued gaining positive traction for the third consecutive session on Wednesday and added to its recent strong recovery gains from multi-year lows amid the prevalent risk-on mood. The recent optimism over the resumption of the US-China trade talks remained supportive of improving global risk sentiment and eventually weighed on the Japanese Yen's relative safe-haven status.
Risk-on mood fuel the ongoing momentum
Bullish traders further took cues from the ongoing rally in the US Treasury bond yields, which extended some support to the US Dollar and further collaborated to the pair's strong up-move on Wednesday. This coupled with some follow-through technical buying, especially after the overnight bullish breakthrough last week's swing high near the 107.20-25 region, further seemed to have fueled the positive momentum.
Hence, a subsequent strength beyond the 108.00 handle, should pave the way for a further near-term appreciating move for the pair. Market participants now look forward to the US economic docket - featuring the release of Producer Price Index (PPI) and wholesale inventories - for some meaningful impetus later during the early North-American session.
Technical levels to watch