USD/JPY advances to highest level since May near 109.50

10-year US T-bond yield adds nearly 7% on Thursday.
The US reportedly confirms the phase-one trade deal will include tariff rollbacks.
US Dollar Index pushes higher above the 98 handle.

Eren Sengezer FXStreet

The USD/JPY started the day below the 109 handle on Thursday and spent the Asian session in a calm manner but rose sharply during the European trading hours after China's Commerce Ministry said that the United States and China have agreed to roll back tariffs.

Trade optimism weighs on safe-haven assets

With the risk-on flows continuing to dominate the market action during the American session, the pair preserved its bullish momentum and advanced to its highest level in more than five months at 109.48. As of writing, the pair was trading at 109.43, adding 0.4% on a daily basis.

Confirming the statement from China, citing a source familiar with talks, Bloomberg on Thursday reported that the US side recognized that the phase-one of the trade deal with China will include mutual reductions in import tariffs. Reflecting the strong risk appetite, the 10-year US Treasury bond yield surged to its highest level since early August and was last up 6.5% on the day. Additionally, Wall Street's three main indexes are flirting with all-time highs.

On the other hand, the selling pressure surrounding the EUR and the GBP on Thursday allows the USD to find demand and causes the bullish momentum to remain intact.

Leading Economic Index and Coincident Index data will be released from Japan on Friday but the risk perception is likely to continue to impact the pair's movements. Wholesale Inventories and the University of Michigan's Consumer Confidence Index will be featured in the US economic docket.

Technical levels to watch for

USD/JPY

Overview
Today last price	109.43
Today Daily Change	0.49
Today Daily Change %	0.45
Today daily open	108.94

Trends
Daily SMA20	108.6
Daily SMA50	107.86
Daily SMA100	107.6
Daily SMA200	109.03

Levels
Previous Daily High	109.19
Previous Daily Low	108.82
Previous Weekly High	109.29
Previous Weekly Low	107.89
Previous Monthly High	109.29
Previous Monthly Low	106.48
Daily Fibonacci 38.2%	108.96
Daily Fibonacci 61.8%	109.05
Daily Pivot Point S1	108.78
Daily Pivot Point S2	108.61
Daily Pivot Point S3	108.4
Daily Pivot Point R1	109.15
Daily Pivot Point R2	109.36
Daily Pivot Point R3	109.52

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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