- USD/JPY edges higher and climbs to fresh multi-month tops on Friday.
- The risk-on mood continues to weigh on the JPY’s safe-haven status.
- Positive US bond yields supportive; subdued USD demand capping gains.
The USD/JPY pair now seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading band near multi-month tops, around the 110.20-25 region.
The pair edged higher on the last trading day of the week and added to the previous session’s sustained move beyond the key 110.00 psychological mark, supported by a combination of positive factors.
USD/JPY supported by the prevailing risk-on mood
The latest optimism over the conclusion of the long-awaited US-China phase one trade deal weighed on the Japanese yen’s safe-haven status and assisted the pair to build on its recent positive momentum.
The uptick got an additional boost amid resurgent US dollar demand on Thursday following the release of mostly upbeat US economic releases – monthly Retail Sales and Philly Fed Manufacturing Index.
Friday’s inline Chinese GDP growth figures, coupled with stronger-than-expected Industrial Production and Retail Sales remained supportive of the prevailing risk-on mood and continued lending some support.
Bullish traders further took cues from some follow-through pickup in the US Treasury bond yields, albeit a subdued USD demand seemed to be the only factor keeping a lid on any further appreciating move.
Moving ahead, market participants now look forward to some second-tier US economic releases in order to grab some short-term trading opportunities later during the early North-American session on Friday.
Technical levels to watch