USD/JPY clings to gains near session tops, eyeing a move beyond 110.00 handle
|- USD/JPY regains traction on Thursday amid US-China trade deal optimism.
- A modest pickup in the US bond yields remained supportive of the uptick.
- The upside seems limited as traders eye US retail sales for a fresh impetus.
The USD/JPY pair edged higher through the early European session on Thursday, with bulls looking to extend the momentum further beyond the key 110.00 psychological mark.
The anti-risk Japanese yen remained on the defensive against its American counterpart amid the latest optimism over the conclusion of the long-awaited phase one trade deal between the world's two largest economies.
USD/JPY well supported by trade optimism
This coupled with some positive comments by the US Vice President Mike Pence, saying that Phase 2 discussions had already begun as negotiators work to resolve differences, further helped boost investors' appetite for riskier assets.
The risk-on flow was further reinforced by a modest pickup in the US Treasury bond yields, which turned out to be one of the key factors that underpinned the US dollar demand and remained supportive of the pair's mildly positive tone.
The tensions, however, remained as the US decided to keep in place levies on some $360 billion of Chinese goods, which might hold investors from placing any aggressive bullish bets and eventually keep a lid on any runaway rally for the major.
Hence, it remains to be seen if the pair is able to capitalize on the move or continues with its struggle to sustain above the 110.00 handle, making it prudent to wait for some strong follow-through buying before positioning for any further appreciation.
Moving ahead, market participants now look forward to the US economic docket, highlighting the release of monthly retail sales data for December, in order to grab some short-term trading opportunities later during the early North-American session.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.