USD/JPY spikes to 109.00 neighbourhood, over 1-week tops on Trump’s comments

• The prevalent risk-on mood gets continued weighing on the JPY’s safe-haven status.
• The ongoing rally in the US bond yields underpinned the USD and remained supportive.
• Bulls are likely to wait for a sustained move beyond 200-DMA, around the 109.00 mark.

The USD/JPY pair refreshed session tops, or over one-week high in the last hour, with bulls now eyeing a move towards challenging the very important 200-day SMA near the 109.00 handle.
 
Following a brief consolidation through the mid-European session on Monday, the pair caught some fresh bids and remained well supported by the prevalent risk-on mood, which tends to undermine demand for traditional safe-haven currencies – including the Japanese Yen.

Risk-on mood remains supportive

The incoming positive trade-related headlines continued boosting investors’ appetite for perceived riskier assets and the same was further reinforced by a strong intraday rally in the US Treasury bond yields, which helped the US Dollar to gain some meaningful traction on Monday.
 
Meanwhile, the latest leg of a sudden pick up over the past hour or so came after the US President Donald Trump told reporters that US-China deal was ahead of a scheduled. This added to the recent trade optimism and provided an additional boost to the major.
 
It is worth reporting that the US Trade Representative's office said on Friday that the US and China have made progress in trade talks and have come close to finalizing parts of a “phase one” trade deal. The US officials have said they hope to sign a deal in mid-November.
 
With Monday's positive move, the pair finally seems to have broken out of its recent trading range and a subsequent positive move beyond 200-day SMA will reaffirm a near-term bullish breakout, setting the stage for a further near-term appreciating move.

Technical levels to watch