USD/JPY: Better bid amid reports China to boost purchases of US farm products
- USD/JPY is extending gains amid easing of US-China trade tensions.
- China is planning to buy more US farm products, according to Xinhua news agency.
- US Treasury yields, however, remain flatlined and could cap the upside in the USD/JPY pair.
The already bid USD/JPY is extending gains on reports that China is planning to buy more US farm products as a goodwill gesture ahead of the next month's high-level trade talks.
China's move comes after the decision by the US to exempt hundreds of products from a 25% duty imposed by President Trump on $250 billion worth of Chinese goods.
The risk assets are responding positively to the latest developments on the trade front. Notably, the futures on the S&P 500 are reporting a 0.20% gain.
That could be the reason behind the drop in the anti-risk JPY. As of writing, the USD/JPY pair is trading at 107.33, representing 0.26% gains on the day. The currency pair added 20 pips to hit a session high of 107.43 in the last one hour, having defended 107.00 in the overnight trade.
The gains, however, could be short-lived if the US yields extend Tuesday's drop. It is worth noting that the 10-year yield is currently flatlined at 1.65%, despite the uptick in the S&P 500 futures, having dropped by seven basis points on Tuesday.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
