The pair remains underpinned as risk trades are looking perky to start the new week, with the S&P 500 hitting a record high and Treasury yields climbing on trade optimism.
USD/JPY stuck to tight 108.70/75 range for the best part of overnight’s trade unto New York traders stepped in which initiated a squeeze to as high as 109.04 – a three-month high, backed by the bounce in US yields and positive sentiment surrounding Sino/US trade relations.
President Trump was stoking the flames of the market’s hopes announcing that the US is ahead of schedule to sign the first phase of a US-China trade deal ahead of when Xi and Trump are scheduled to meet in Chile next month. This echoed the news that Chinese officials said parts of the text are “basically completed.”
Subsequently, the US 2-year Treasury yields climbed from 1.63% to 1.67% – a one-month high, before steadying at 1.64%. The 10-year yield climbed from 1.80% to 1.85%. US benchmarks were also buoyed by the risk-on sentiment, with a fresh all-time closing high for the S&P 500, weighing on the Yen.
USD/JPY SHORT (Sell)
ENTER AT: 109.01